updated 03:40 pm EDT, Thu July 16, 2009
Pali on iPhone, ATT future
Growth could come to a crawl at AT&T if the company loses its exclusive iPhone deal, argues Pali Research. The deal is nominally set to expire in 2010, after which the US may finally join other countries in supporting competing iPhone networks. The most likely candidate for a second iPhone carrier is thought to be Verizon, which has reportedly been in talks with Apple, and may be the only alternative in providing blanket coverage across the US.
Should AT&T not be able to win an extension of its iPhone contract, it is thought that just 1 million new customers could be added in 2010, as compared to the 4 million accrued in 2008. Many of the company's potential customers are expected to flee if a Verizon iPhone becomes available, due to the latter carrier's superior network. "We estimate that nearly a third of AT&T's post-paid customers are being retained by AT&T primarily because of the iPhone exclusivity," Pali analysts write.
Technical obstacles exist for a Verizon iPhone however, namely the need to build a CDMA variant, or alternately an LTE (4G) version which would have to wait until 2011. Both AT&T and Verizon are still constructing their LTE networks, and AT&T is not expected to be ready in 2010. A 4G-capable iPhone could be used interchangeably with either carrier.