Piper Jaffray: If AT&T loses exclusive iPhone deal, Apple gains

“Piper Jaffray just issued a report laying out the reasons why Apple is likely to sign up multiple carriers for the iPhone in the US, whenever its exclusive distribution arrangement with AT&T lapses (probably in mid-2010). Among the obvious facts—such as that the company has moved away from exclusives in every country where it has had them—are some interesting nuggets. For example, Apple’s share of the smart phone market in France has ballooned to 40%, from 15%, in just six months since carriers SFR and Bouygues began selling the iPhone along with formerly-exclusive partner Orange,” Peter Burrows reports for BusinessWeek.

“Also, the firm did a cost-benefit analysis on whether Apple should not only end exclusivity in the US, but also spend the money to develop and support a version of the iPhone that runs on the CDMA network technology used by market giant Verizon (which doesn’t support the current iPhone, which works on GSM technology),” Burrows reports. “While Apple would lose around $50 in subsidy per phone (just 10% of the total subsidy—so not a huge haircut) and incur around $25 in extra development costs per phone, these would be a small price relative to the increase in overall sales, Piper argues.”

Full article here.

24 Comments

  1. Going with another carrier is also the only way I will ever buy another iphone. I’m sure they don’t give a crap about me, I’m just one person, but I know I’m not the only one that feels that way.

    AT&T;-free for 2 weeks now and loving it.

  2. Verizon is already telling their customers (and potential customers) flat out that they are getting the iPhone this January.

    I’m sure I wasn’t the only one they told this to.

  3. false

    Apple loses and the world loses. Most of the world uses GSM. What should happen is VERIZON should SWITCH to GSM, and then use the iPhone as is.

    Creating another version of the iPhone is not the answer. It will dilute resources away from real R&D;Anyways, the GSM/CDMA rift needs to be eliminated. Carriers should have a common protocol and move on.

  4. Boy, I have a hard time imagining Apple building an iPhone with a different chipset for the same market. You go to the Apple store and your choices are now black or white. If you suddenly introduce GSM/CDMA to the mix, that sounds very un-apple to me.

    Are carriers converging on a single protocol? If so, I could imagine that APple might just wait for that to happen–or, perhaps more likely, make it happen.

  5. ^ @Planar

    WTF?!? Do you not know that both Verizon and AT&T;will adopt the LTE standard for 4G…essentially what you are asking is already happening…

    so wat the hell are you babbling about?

  6. Wtfman

    the LTE network of which you speak is years away and for many of it’s early years will fall back on old CDMA / GSM legacy tech. It’s not even certain that the various US carrier LTE networks will ever be fully compatible tho it would be nice.

  7. The only negative I’ve found with my iPhone is its functionality as a phone. ATT has horrifically crappy coverage, especially in San Francisco. And always it craps out on you when you need it the most!! I can’t wait for the VeriPhone. The lines at Verizon will be longer than ATT ever dreamed.

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