The real reason the AT&T exclusive iPhone contract expires 2010 | new iPhone release

NOTE: If you’re looking for information on the new iPhone 3GS announced at WWDC 2009, click HERE.

In the US, AT&T has an exclusive contract to support the iPhone.  No other carriers can sell or officially support the iPhone.  This deal between Apple and AT&T was originally due to end in 2009. This date was moved to 2010. Interesting. The change of this date could indicate that the next generation iPhone isn’t set to be released until 2010.

Here’s a quick comparison of the difference between a 2010 and 2009 next generation iPhone release date.  Keep in mind that the exclusive contract with AT&T doesn’t end until 2010.

  1. Ability of Apple fans to upgrade | 2010: By 2010, all the people that originally bought an iPhone in 2008 will have the opportunity to upgrade their phones at a discounted price due to the 24 month AT&T contract expiration (after 24 months you get the ability to upgrade or buy a new phone at a discounted price).  2009: Alternatively, if the iPhone came out in 2009, Apple’s largest fan base (those that bought the iPhone 3G immediately after it was released in 2008) would not have the ability to upgrade to the new iPhone at the discounted, subsidized price.  Despite the loyalty of Apple fans and their willingness to buy brand new products regardless of whether or not the last model is obsolete, they will probably not shell out the extra $400 for a phone – they’ll wait for the discount.
  2. iPhone availability and market hype | Due to the fact that the iPhone is only available to AT&T customers, those without AT&T only have two choices if they want to own an iPhone – switch to AT&T to get the best, or settle for a different smartphone from their non-AT&T carrier.  These two options have led a lot of people to settle for the second option, and it’s been said that the iPhone is single-handedly driving smartphone growth.  Apple is going to want to make sure that when they release the next iPhone that ALL of the hype will drive growth strictly to iPhone sales, not to the entire smartphone market, and there’s no way to do that besides increasing its carrier availability. 2010: In 2010 the iPhone will be open to all carriers which will multiply the intensity of the marketing for the iPhone – everybody will be excited about the new iPhone, and there will be no reason for non-AT&T customers not to be excited since every carrier has them.  2009:  If the next generation iPhone is available in 2009, the hype around the release of this smartphone is going to continue to follow the trend where the iPhone drives smartphone growth with other carriers that don’t have the iPhone, until 2010 when the exclusive contract expires.
  3. iPhone availability and non-AT&T upgrades 2010: Some people weren’t able to get the iPhone in 2008 because they didn’t have AT&T.  Instead they bought a different smartphone that works with their non-AT&T wireless service provider.  When do these contracts expire?  When can they buy a new phone at a discounted price?  2010.  2009: If the next generation iPhone comes out in 2009, non-AT&T customers still won’t be able to buy the iPhone, resulting in amazingly slow sales for the first year of the next generation iPhone.

The next generation iPhone release date seems to lend itself well to 2010.  Other interesting factors come into play here regarding carrier adoption of the iPhone and the competition of other smartphones creating a lockout of the iPhone with a specific carrier.  I won’t dive into these issues, but if anybody is interested it would be great to see some discussion about the different business impacts of some of the pros and cons of releasing the next generation iPhone in 2009 vs 2010.  Let me know your thoughts in the comments section.  Open discussion! (I’ll try to approve comments ASAP).

Note: this article relies on the following assumptions:

  • That the contract between AT&T and Apple will in fact expire in 2010
  • That with each release of the iPhone there is a period of increased hype, resulting in larger sales volume
  • That other carriers will adopt the iPhone after the contract between AT&T and Apple expires.

UPDATE: My assumptions about the iPhone not being released until 2010 is incorrect.  However, the issues above still pose as questions as to why Apple would choose a date other than 2010.

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25 Comments

  1. Givi
    Posted April 16, 2009 at 7:05 pm | Permalink

    Exsisting iphone customers can upgrade to a new model at a discounted price even if they purchased their first iphone a month before the release of the new model!

  2. Jorge
    Posted October 30, 2009 at 9:59 am | Permalink

    On which month is the contract expiration of AT&T and Apple?

  3. sylvia
    Posted December 12, 2009 at 2:59 pm | Permalink

    Which month in 2010 is the expiration of the contract for the iphone between Apple and AT&T?

  4. joe
    Posted December 13, 2009 at 3:46 pm | Permalink

    I have heard from At&t corporate that the iphone will be out in 2010.

  5. usa market
    Posted December 16, 2009 at 7:04 pm | Permalink

    when apple & att contract is up the crave for the iphone will do a huge sparrell down it will not be the phone that everybody wants it will be the phone that everybody says man/girl you still got that antique

  6. Jared
    Posted December 31, 2009 at 9:50 am | Permalink

    usa market, you’re stupid. Just saying. That’s all.

  7. Brandon
    Posted January 23, 2010 at 2:12 pm | Permalink

    It is about time they unrestrict the carriers for I phone.A T&T has the worse customer service, horribly expensive plans and a ton of dropped calls.

  8. alex masouras
    Posted February 3, 2010 at 7:52 am | Permalink

    what month will the contract between at&t and apple expire in 2010

  9. ocman
    Posted February 3, 2010 at 7:50 pm | Permalink

    I hope VZW gets the Iphone, I left after many years cause I wanted the Iphone but being from O.C. CA and the surrounding areas wow i switched within the timeframe back I’ve never had so many dropped calls and the sound is horrible too.

  10. Oman
    Posted February 7, 2010 at 8:57 pm | Permalink

    Can’t these phones be upgraded by obtaining new software?

  11. iphone dumped
    Posted February 9, 2010 at 9:23 am | Permalink

    The 3G network at AT&T cannot support the volume of users. Phone quality on mobile to mobile iphone users poor. Volume goes up and down in a regular cycle. Sound becomes muffled like the person is talking through a pillow then gets distorted on a regular basis. Phooy! I dumped my iphone
    and 2 year conttract with AT&T within the 3 days and ran for my life. I loved everything else about the phone but the main reason I bought it.

  12. Matt Buell
    Posted March 2, 2010 at 3:00 pm | Permalink

    I personally think that by making the iPhone availible for all carriers would be the best idea for sales possible, but I was reading other articles and I saw the iPhone 4G or whatever it’s going to be called will be released June 2010…My birthdays that month(:

  13. mr nobody
    Posted March 6, 2010 at 2:39 am | Permalink

    Usa is right though, I mean look what happened to the “razor” it was priced high when it first came out and look at it now. Tech. Is always advancing. But I hope they switch to all carriers..

  14. mr nobody
    Posted March 6, 2010 at 2:45 am | Permalink

    On a smaller(but bigger) note ,idk why people spend so much money on apple products that’s the same as the one they created a month or two before “cmon son” but people love it anyways. At&t might drop the ball cause demand for the iphone is booming even for the people that’s not on at&t.

  15. mr nobody
    Posted March 6, 2010 at 2:46 am | Permalink

    On a smaller (but bigger) note ,idk why people spend so much money on apple products that’s the same as the one they created a month or two before “cmon son” but people love it anyways. At&t might drop the ball cause demand for the iphone is booming even for the people that’s not on at&t.

  16. Posted March 13, 2010 at 8:14 pm | Permalink

    FOR THE THIRD TIME IN THIS COMMENT LOG

    WHAT MONTH IS THE CONTRACT GOING TO BE UP???

    Thanks,
    CJ

  17. Posted March 20, 2010 at 6:15 pm | Permalink

    From what I have ready, the contract expires in June 2010.

  18. Nick Bodkin
    Posted March 23, 2010 at 8:07 pm | Permalink

    Iphones exclusive contract with AT&T is set to expire in June of 2010, specifically the week of the 29th, which interestingly enough, apple has a keynote set for the 29th

  19. SHREE
    Posted April 7, 2010 at 10:48 pm | Permalink

    I PLAN TO GET THE IPHONE BUT I AM WAITING BECAUSE IF VERIZON OR ANY OTHER COMPANY GETS IT, THEN I DONT WANT IT ANYMORE,, I HAVE A LOT OF FAMILY AND FRIENDS THAT HAVE THE IPHONE AND IT S OUT OF SIGHT TO THEM THE SERVICE AND ALL.. HOPE ATT AND APPLE KEEP THEIR RELATIONSHIP WITH THIS AND IF OTHER COMPANIES WANT A PHONE LIKE THIS, LET ME DO WHAT THEY ALWAYS DO.. COPY CAT ATT AND GO AND GET SOMETHING SIMILAR.. IT S A OPEN MARKET NOW THEY CAN DO IT.. IF THEY CAN!! OR LET ME SAY THEY CAN TRY!

  20. Jon
    Posted April 22, 2010 at 6:30 pm | Permalink

    AT&T BLOWS!!!! They always have! The network sucks and I drop calls all the time. I live in a major metropolitan area and I have the worse coverage. I’ve had Sprint, Verizon, and T-Mobile. I truly hope Apple allows any carrier to have the iPhone.

  21. poncho
    Posted May 2, 2010 at 10:00 pm | Permalink

    its true att blows something fierce. First of all there is a 40 smart phone fee as of last month i believe. Secondly i have a $90 a month bill with only 450 minutes! can u believe that! Anyway i can only hope that apple spreads to the other carriers and gives att a little competition and may prompt them to drop there rates!

  22. RobChronique
    Posted May 6, 2010 at 10:34 pm | Permalink

    i am thrilled that the iphone contract with att is expiring~! i’m with Tmobile and have been sporting a jailbroken iphone and LOVE IT! my upgrade is due this october and i’m stoked that i will have the opportunity to possibly upgrade to a new iphone w/out having to upgrade to the htc and sell it, buy an iphone and jailbreak it!! VIVA IPHONE!

  23. Iurie
    Posted May 20, 2010 at 8:21 pm | Permalink

    So, you definately don’t know how ATT upgrade program works.
    It is not related to your contract date, but how much money you spend with them, how many non pay suspensions you have and how pain in the rear you are as the customer.

  24. cwest
    Posted May 21, 2010 at 10:00 am | Permalink

    The contract was due to ex. this june however that was found to be a rumor. Most people in the sector believe AAPL has no locked contract with ATT right now and termination rights at anytime.This would pose the idea that once the new phone is released the anouncement would be let out the att pact is over. I dont think Apple would sign another exclusive contract with anyone carrier.

  25. Dropped in Miami
    Posted June 30, 2010 at 5:27 pm | Permalink

    Hello,
    After being a loyal customer of AT&T (wireless 24 years, land line 45 years and counting, direct TV 15 years and counting. I can honestly say their wireless prior to the Iphone sucks. Dropped calls even then. Their phone home service and internet which I failed to detail (10 years I had Hughes Satellite also a disaster) are both deplorable. Direct TV just as bad. Regrettably I live in Miami Fl. (Little Gables) and we do not have the option of going to any other carrier. Comcast in our area is no better. I can’t get u-verse or fiber optic internet or any of the great tech out there. At this point I just wish my current AT&T product s would work as advertised. No I haven’t been a “pain in the ass” customer but I guess I have nothing to lose. I have Verizon. Now 2.5 years and no complaints thus far. I wish Apple offers the 4G Iphone to ANY carrier other than AT&T.

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