AT&T Gets the iPhone Until 2012

| News

Thanks to statements in legal documents, Apple has confirmed that its exclusive iPhone distribution deal with AT&T was originally set to run into 2012. The confirmation was found in documents Apple filed as part of a class action lawsuit against the company that launched in 2007, according to Engadget.

The lawsuit alleged that Apple and AT&T used monopoly power to trick consumers into buying an iPhone with a two-year contract, but in reality requiring five years since the smartphone can’t be used with other carriers.

“[T]here was widespread disclosure of [AT&T’s] five-year exclusivity and no suggestion by Apple or anyone else that iPhones would become unlocked after two years,” Apple’s filing said. “Moreover, it is sheer speculation — and illogical — that failing to disclose the five-year exclusivity term would produce monopoly power.”

While the general consensus has been that Apple’s five year deal with AT&T was speculation, Apple claimed it has been public knowledge for some time. “The duration of the exclusive Apple-[AT&T] agreement was not ‘secret’ either. The [plaintiff] quotes a May 21, 2007 USA Today article – published over a month before the iPhone’s release – stating, ‘AT&T has exclusive U.S. distribution rights for five years-an eternity in the go-go cellphone world,’” Apple said.

While Apple’s statements seem pretty clear cut — and fly in the face of the ongoing rumors that the iPhone is coming to Verizon — there’s always a chance that the Cupertino company could’ve renegotiated the deal at some point after the iPhone was launched. If so, there’s a chance consumers hoping for any carrier other than AT&T won’t have to wait until 2012 to get their iPhone.

Sign Up for the Newsletter

Join the TMO Express Daily Newsletter to get the latest Mac headlines in your e-mail every weekday.

Comments

Lee Dronick

AT&T is probably making a good bit of money with their relationship with Apple and the iPhone. I am thinking that with the iPad 3G service deal, Apple & AT&T may have renewed their marriage vows.

Bosco (Brad Hutchings)

According to Engadget, the judge also allowed plaintiffs to explore the iPhone 1.0 app situation. Nice to see that scab picked at.

dannsh

As long as AT&T holds the strangle hold on the iPhone I will not get an iPhone.
Not only do I not like the AT&T network (dropped calls when I lived in California), AT&T does not have coverage in the Four Corners of Colorado.

Lee Dronick

AT&T does not have coverage in the Four Corners of Colorado.

No coverage? The only “covers” in the Farmington area are on beds smile

Where did you live when you were in California. AT&T is pretty good here in San Diego and most other urban areas that I have visited. True, it seems once that you are out of the cities and off of the interstates then AT&T is not well represented, it only makes sense that they first build where the people are.

dannsh

I moved from the Sacramento area. I had AT&T when it was Cellular One.
Dropped calls left and right. So I switched to Verizon.

Lee Dronick

I moved from the Sacramento area.

Thanks, I went through there last year on a road trip from my sister’s place in the Bay Area to Mono Lake. I didn’t notice AT&T coverage either way in the Sacramento area because I zoomed through. However, I did have pretty good coverage, but not full, down Hwy 395 from Carson City and that is a fairly remote section.

Tik Tok

I live in Sacramento and have generally fine coverage with ATT.  I understand that people have issues with ATT, but no phone company is going to ring all the bells for all the people all the time.  Like cable TV companies, we can have an experience with one that drives us away—until we have to put up with the next one.  Fact is, all the phone companies are pretty poor overall, and what competition there is does not seem to be driving much improvement very fast for those of us who pay.  Verizon, with its outdated system, would require Apple to make a second type of iPhone/iPad to cope, so why isn’t it upgrading to get that business?  But if Apple did add Verizon, that might wake ATT up enough so it would provide us better options than, e.g., requiring double payment for data plans with iPhone and iPad.  Bottom line from Apple’s standpoint is they are making money.

Log-in to comment