AT&T CEO Admits It Won't Have The iPhone Forever

This week has seen the quarterly earnings reports from both Apple and AT&T -- partners in making and distributing the iPhone. The iPhone is clearly a hot seller, and AT&T knows the marriage can't (and won't) last forever.Apple sold over 5 million iPhones during the most recent quarter. Of those, 2.4 million were activated on AT&T's network (the rest were sold in other markets around the world).

The numbers show that the relationship between AT&T and Apple is strong enough to drive sales -- lots of them. But how long can this relationship last? That's a question many are seeking the answer to.

Since the beginning (Jan. 2007), neither AT&T nor Apple has said how long the exclusivity agreement will last. Many believed it to be about 5 years. Several months ago, we learned that it was probably three years, and that AT&T was looking to extend that relationship.

The problem is that AT&T and its network have long been viewed as the Achilles heel of the iPhone. Service is spotty in some areas, and AT&T has failed to deliver some of the features that other network providers are offering overseas -- such as tethering and MMS.

Today, AT&T CEO Randall Stephenson admitted that the reality is, AT&T won't be the exclusive carrier of the iPhone in the U.S. forever. "There will be a day when you are not exclusive with the iPhone," Stephenson said. "On balance, I think [the ATT-Apple relationship] works really, really well -- maybe as well as any strategic partnership we have."

I am not sure Apple agrees. During the WWDC keynote address in June, it was readily apparent that AT&T wasn't living up to or delivering the performance of some of Apple's other business partners. Apple could use this as leverage to extricate itself from its arrangement with AT&T.

The question still remains, though, just how long is this exclusivity agreement? We can only hope shorter rather than longer.