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Why AT&T Wants To Keep the iPhone Away From Verizon

Hugh Pickens writes "Saul Hansell of the NY Times has an interesting post analyzing AT&T's earnings report and highlighting the enormous stakes involved in the renewal of its exclusive contract to distribute Apple's iPhone in the United States. Hansell does some rough calculations: 'If the average iPhone customer brings in $90 a month, or $1,080 a year in revenue, and the operating profit margin stays constant at 26 percent, that means an iPhone customer represents at least $561 in operating profit over a two-year contract,' says Hansell. 'Put another way, if the company gets 2.5 million new customers a year because of its iPhone exclusivity, the deal represents at least $700 million a year in operating profits — profits that it could lose if Verizon sold the iPhone, too.' With those sort of numbers, AT&T has every reason to make Apple an offer it can't refuse to keep its exclusive deal for another few years. Of course, the incentives for Verizon are presumably the mirror image, so expect Verizon to come to Cupertino, checkbook in hand, to see what sort of deal they can make. 'The benefit of somewhat more iPhone sales from wide distribution is likely to be swamped by a huge bid from AT&T to keep exclusivity, and an equally high bid from Verizon to win some (or maybe even all) of the business for itself.'"

3 of 237 comments (clear)

  1. I don't understand by buss_error · · Score: 0, Troll

    why the iPhone is so popular. I looked at it, sure, it's nice, but the price is so high I can't justify buying one - let alone the monthly charge.

    On the other hand, I want a phone. I don't want a camera, music player, handheld computer, contact manager, schedule keeper, blah blah blah. I want a phone. I want a phone to make phone calls. It's nice if it keeps a phone book, but the numbers I need, I know. Most of the time, (not the case with the iPhone, mostly) these "multi-tool" tech things don't do ANYTHING very well, though they do a lot.

    --
    Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.
  2. Re:CDMA / GSM by rakslice · · Score: 0, Troll

    Presumably if every other major cell phone manufacturer can make pretty much identical phone models for GSM and CDMA, it can also by done by... Oh wait, it's Apple; nm. =)

  3. Re:Verizon rejected.... by qwertyatwork · · Score: 0, Troll

    Send me to a page that requires a username and password to log in. That's not going to work. It didn't take to much research to find the manual. The AT commands are for the device itself. Things such as changing DTMF length, turning speaker phone on. Absolutely nothing to do with either a CDMA or GSM network. I love the freedom that the internet gives us. I hate how 12 year olds like you post shit you know nothing about.

    And fuck me? Sorry, Im to busy fucking your mother.