updated 03:05 pm EDT, Thu May 6, 2010
ATT possibly buying time through cheap iPad plans
AT&T may have used the launch of the iPad to buy a last-minute extension of its iPhone exclusivity deal, BroadPoint AmTech analyst Brian Marshall claimed late Wednesday. He believed that AT&T cut its deal for $30 unlimited, contract-free iPad data in exchange for extending its sole rights to the iPhone in the US until 2011. The evidence was the purported rejection of a Verizon iPad deal that Marshall's sources had said was virtually certain.
Marshall didn't cite any direct evidence of a delay in a Computerworld interview.
AT&T is widely thought eager to draw out its exclusivity as long as possible and may have allowed the heavily subsidized iPhone 3G in 2008 in return for an extension until 2010. It had been struggling to compete with Verizon up until the iPhone deal and since then has regularly posted record quarters where many, if not most, of its net subscriber additions were iPhone buyers.
Verizon is currently larger and growing but has counted mostly on its Alltel buyout for its numerical advantage. It has repeatedly tried to offer "halo" phones as a lure, but until Android phones like the Motorola Droid and HTC Droid Incredible hasn't had much success. These phones have sold well relative to Verizon's lineup but have usually sold at considerably slower rates than the iPhone.
The currently second-place AT&T may be aware of the potential for a sudden halt to its growth should the iPhone be available at another major US network. A recent study by ChangeWave has pointed out that as much as 19 percent of existing Verizon customers would buy an iPhone and that the possible defection rate at AT&T is lower than at most other carriers because of the iPhone, at 8 percent. When the exclusivity ends, analysts have speculated that AT&T may see a large-scale defection to whichever other carrier has the Apple handset, primarily in areas with oversaturated AT&T networks like New York City and San Francisco.
Marshall now estimates that a Verizon launch at the start of 2011 could see it sell as many as 11 million iPhones by itself, or enough to compete with results like those seen by AT&T in the past year.