Apple expected to continue exclusive AT&T deal

Despite the current government investigations surrounding exclusive relationships between handset makers and cellular networks, a number of analysts expect Apple to extend its iPhone deal with AT&T. iSuppli analyst Francis Sideco believes the continued growth of AT&T's HSPA standard will prove more attractive than the EVDO standard used by Verizon.

"The main reason Apple is likely to stick with AT&T beyond 2010 is the relatively wide usage and growth expected for the HSPA air standard used by the carrier for 3G data," Sideco says.

The research company expects the global subscriber base using HSPA to expand from 269 million this year to 1.4 billion in 2012. The EVDO standard, however, is only expected to rise from 145 million to 304 million subscribers in the same time period.

Although the FCC inquiry is taking a broad look at the entire industry, business deals behind devices such as the Pre and iPhone are likely to be individually investigated. The Commission will be assessing the impact of such deals on prices and availability for consumers. Many have expressed frustration with the carriers and handset makers for inflating prices or restricting access to certain phones.

Unconfirmed rumors suggest Apple execs have been quietly talking to Verizon about a possible iPhone deal, even before the regulators disclosed the investigation. Bernstein Research analysts Craig Moffett and Toni Sacconaghi claim a Verizon deal could help to double iPhone sales, although Apple has maintained that it is satisfied with its relationship with AT&T. Despite the larger volume on two carriers, the subsidies would likely be slashed on a non-exclusive deal.

The FCC inquiry remains in progress, with no timetable set for completion. It remains unknown if the Commission plans to tighten regulations based on its findings.

by MacNN Staff