VeriPhoniacs Denied Until 2012? - InformationWeek
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5/11/2010
09:00 AM
Eric Ogren
Eric Ogren
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VeriPhoniacs Denied Until 2012?

Thanks to some sleuthing over at Engadget, we know now that the original exclusive iPhone distribution agreement between Apple and AT&T was to last five years. That would put a Verizon-compatible iPhone available at some point during 2012 the earliest. Some big questions remain, however.

Thanks to some sleuthing over at Engadget, we know now that the original exclusive iPhone distribution agreement between Apple and AT&T was to last five years. That would put a Verizon-compatible iPhone available at some point during 2012 the earliest. Some big questions remain, however.Believe it or not, the information comes directly from Apple itself. Unhappy people in the U.S. sued Apple and AT&T back in 2007 over the exclusivity agreement between the two companies. The lawsuit seems somewhat far-fetched. Valid or not, Apple had to respond. Blog Engadget uncovered the public court documents of the case from 2008 and found two meaty passages. They read:

"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."

... and ...

"[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... Moreover, it is sheer speculation - and illogical - that failing to disclose the five-year exclusivity term would produce monopoly power..."

It's there in plain language. Apple openly admits (or at least fails to contest) that the agreement was to last five years from its inception in 2007. So that means no Verizon iPhone until 2012, right? Not so fast.

Agreements can be changed, amended, cancelled, and negated. We have no idea if the original agreement between Apple and AT&T is still in place. Even if the agreement is still in place, it's likely that it has been altered by now. Apple surely has plenty of ammunition to use against AT&T if it wanted out.

iPhone users in the U.S. have complained about service quality from day one. Apple has stood by its U.S. network partner through thick-and-thin, but you know it has to be seething behind closed doors. Just this week, AT&T ranked first among the nation's top wireless network operators -- for dropped calls. That's not a metric for which a network typically wants to be known.

Given the recent news that Android handsets are now outselling the iPhone in the U.S., Apple's best move to stay ahead of the curve is to offer the iPhone through as many network operators as possible. Will Apple open up the iPhone to Verizon before 2012? We just don't know.

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