AT&T in talks to extend iPhone exclusivity

US carrier looking to tighten its grip until 2011

AT&T in talks to extend iPhone exclusivity
US mobile carrier AT&T currently holds the immensely valuable iPhone exclusivity contract with Apple, and is apparently looking to extend that period into 2011.

This would add up to a period of four years, which is an incredibly long time in terms of a handset’s shelf life. For an ordinary mobile, the technology would be next to worthless to secondary carriers once the exclusivity runs out, though in the case of the iPhone it’s a considerably different market.

But Apple is acutely aware that a huge number of potential customers aren’t held back by the switch to the iPhone, but the switch to a different carrier. A continued exclusivity would encourage more outright handset purchases and jailbreaking of the device - two areas that don’t benefit Apple or the iPhone as much as data connected contracts.

AT&T is already heavily subsidising the iPhone handset as part of its current exclusivity deal, and many analysts are arguing that relaxing such a contract would actually allow the carrier to customise its use of the iPhone and expand profits through more and better consumer offers.

The real reason behind an extended contract is probably more to do with shutting out the competition rather than bolstering profits - something the French courts took serious interest in lately.

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