75% Chance iPhone Remains AT&T Exclusive iPhone Carrier in 2010
Credit Suisse Research analyst Jonathan Chaplin thinks we can expect Apple’s iPhone to remain exclusive to AT&T for an additional 12-18 months, long past some people’s expectations (and recent rumors). Not only will it remain exclusive, Chaplin says, but the delay will have a major negative impact on Verizon, causing him to lower his rating on Big Red from “Outperform” to “Neutral” and cut his share price target from $32 to $30.
“Our analysis suggests that Apple will eventually sell the device at all carriers; however, there is a much greater probability that AT&T keeps exclusivity for another 12-18 months than investors realize,” Chaplin wrote. “We think this has profound impacts for Apple, the carriers and the other handset OEMs.”
Credit Suisse is 75% certain that AT&T will keep their stranglehold on iPhone for the rest of this calendar year.
“We conclude there is only a 50% probability that it (exclusivity) ends in 2010,” Chaplin wrote. “Next, we try to determine whether AT&T bids for another year of exclusivity if exclusivity does end in 2010. We conclude they would and they can afford to compensate Apple such that Apple would be economically indifferent. Our approach yields a 25% probability for this outcome. Taken together, we see a 75% probability that AT&T keeps exclusivity for another year.”
Those of us here at TiPb have often wondered “analyst” predictions were any more reliable than magic 8-ball results, so we will ask you, our readers — will we ever see an iPhone on Verizon or is Steve out to bury them for rejecting the iPhone the first time around? Sound off in the comments!
[Via Apple Insider]
February 8th, 2010 at 9:15 am
Thats fine with me. At&t is awesome where I live and travel. Big red sucks in my area. With there dial-up 3g. Reliable my foot. Had them done that.
February 8th, 2010 at 9:16 am
It’s a win win for Apple & AT&T. I don’t see it changing anytime soon.
Look what V did for Palm. They turned Palm’s flagship into a “mom” phone. Verizon reps are hardly sold on it.
Over at AT&T, they let Apple do the marketing. Every AT&T store has a mini Apple store inside. What’s even better is that most AT&T reps are sold on the iphone and sell it. Having this kind of control is priceless.
February 8th, 2010 at 9:17 am
Interesting!!! So much for a Big Red Iphone for this year!! AT&T must be coming up with some pretty good negotiation deals!!!
February 8th, 2010 at 9:20 am
That’s interesting, because I was just having a conversation with someone who claimed he was working with an advertising firm on a pitch for the iPhone on Verizon…Whom to believe?
I’m also skeptical that Apple would build a CDMA phone.
February 8th, 2010 at 9:24 am
Bury them Steve!! VZW has done way too much “dogging” on the iPhone. They’ve tried their best to kill the iPhone with the dreaded Storm, Storm2 and Droid. Droid’s OS is very nice but the device itself is horrible…slide out keyboard just kills the device altogether…to me it is built CHEAP!! This seems to be an ongoing trend for Big Red. However, they do have the best “outdated” network int he biz!! If I were Steve I’d sell it everyone but!!
February 8th, 2010 at 9:26 am
25% of the people with iPhone’s will have to jailbreak & unlock!
http://www.diverse-group.com/menu/blog.html
February 8th, 2010 at 9:29 am
BIG MISTAKE VZW!!! Looks like their sticking with Android smartphones (Droid already there, Nexus One coming in Spring). Now they are going to lose EVEN MORE customers with the new iPhone 4.0 coming out this summer.
February 8th, 2010 at 9:31 am
iPhone has multitasking on Apple’s apps (native). There is one multitasking that with Verizon as a carrier , can’t happen… Data voice simultaneously ( only with LTE).
Verizon voice service is good because it doesn’t carry data…
Is an advantage as a business person to send /receive an email , surf the web, maps and etc while talking… IMO.
February 8th, 2010 at 9:50 am
I find this odd since just last week I was in a workshop with one of Apple’s senior directors for educational instruction and he said, when asked about the iPad/iPhone being on other carriers (sorry, AT&T is worthless in Iowa) and he said, “Well, the contract with AT&T is set to expire this year, so I believe you will see Apple products on other carriers like Verizon.” He was asked 2010 and he repeated it rather reassuringly. He quickly changed the subject…
So, who knows???
February 8th, 2010 at 9:51 am
Raffy, Verizon doesn’t need LTE to do Data/Voice simultaneously, they could migrate the network to HSPA much like was done with the canadian CDMA carriers late last year.
February 8th, 2010 at 9:57 am
@Raffy
except if that business person travels a lot, in which case they might find themselves in one of the many psrts of the country not covered by att’s 3g..what does that mean? (edge…no talking and browsing. Or if you’re browsing calls can’t even push through and interrupt. Straight to VM)
February 8th, 2010 at 10:00 am
My best friend’s dad is a big wig at AT&T and he even said apple won’t be renewing their contract. He said apple wants to prove it’s AT&T’s network that sucks, not the iPhone that has the issues.
February 8th, 2010 at 10:05 am
I believe the exclusivity is over. There might be aVerizon phone this may but apple will probably require a substantial commitment from VZ.
VZ will surely panic if the ipad really takes-off. imagine VZ customers only buying low-end phones while purchasing ipads with 3G from AT&T.
February 8th, 2010 at 10:06 am
Question is what is this all about. Is it a technology/chipset issue, a subsidy issue or something else? Analysts being analysts they haven’t got a clue and until someone here or at another site like BGR comes up with details we’re all truly in the dark.
February 8th, 2010 at 10:07 am
I reay couldn’t see iPhone going on Verizon. Not because of an exclusivity contract between AT&T and Apple, but because I don’t see them releasing a phone without any form of Verizon customization. Either in the form of software or a little Verizon stamp on it somewhere. Apple isn’t going to taint their phone with someone elses brand, and they shouldn’t.
February 8th, 2010 at 10:09 am
….That seems like some pretty shoddy “analysis”. First off, where are they coming up these probabilities? He doesn’t site anything, and keeps saying “we conclude” and “we determine”.
2nd; learn math. You can’t just say “well there’s a 50% chance of this and a 25% chance of that, so overall, we determine there is a 75% that it will stay with AT&T.” Sorry Chap, it doesn’t work that way. If there’s only a 50% chance iPhone will even stay with AT&T during 2010 in the first place, and then only a 25% chance it will stay after that, then that hardly gives it a 75% chance.
This is dumb.
February 8th, 2010 at 10:19 am
I don’t think it’s going anywhere. I don’t care I get 4000k down and 300k up at my house. Which is faster than 99% of free wifi connections. It’s pretty bad when I go to a coffee shop and stay on 3G. I switch it to wifi. Speed test it. Pull 400k down. Back to 3G to see 2800k down at lunch time.
AT&T is experiencing something no one else has ever had to deal with. And that’s the fact that whn the iPhone is around at major sporting events it sucks down so much data that all of the spectrum is used up. People complain. Well the guy next to me on Verizon can make a call. Yeah that’s a call, in a 50,000 seat stadium, looking at statistics. There are over 2500 iPhones in a 1/8 mile radius. No other company has to deal with that kind of problem.
February 8th, 2010 at 10:26 am
With AT&T ‘fessing up to the problems their network is experiencing in NYC, I could see AT&T making a big pitch to extend an expiring exclusivity contract with Apple. I would imagine there are people on both sides of the issue both at Apple and AT&T. This analysis is merely suggesting that there is a high likelihood (but not approaching certainty) that (1) AT&T would make their pitch to Apple for an extension; and (2) that AT&T’s pitch would mollify naysayers at Apple with money. It all sounds pretty reasonable to me.
February 8th, 2010 at 10:57 am
1) When Apple had zero leverage, they would not adapt to Verizon’s terms.
2) Three years later, Apple has a ton of leverage, and you people think now they would?
That defies logic. Apple will release an iPhone on Verizon on Apple’s terms, or not at all.
Still, it is always fun to read people who treat every mention of Verizon like garlic to vampires. Its a fecking phone company, folks, thats it. Even if they do build and release a CDMA phone for Verizon, it will not change your AT&T phone, except maybe to release some network congestion.
Blue AT&T, Red Verizon — the only color that does or should matter to either company (or Apple, for that matter), is green.
February 8th, 2010 at 11:16 am
@BootsMcGavin
To be fair to Credit Suisse, it seems more like imprecise excerpting at AppleInsider than a failure of their math. If the analyst is considering those events in a sequential chain, where one follows the other, then the chances would be:
50% excl remains + (50% exlc ends * 25% rebid) = 62.5% chance
However, if they consider these as simultaneous alternative possibilities, then yes, the chances are as written:
50% excl remains
25% excl expires, but AT&T re-ups
25% excl expires, AT&T unable/unwilling to re-up
The article leaves it ambiguous which approach Credit Suisse was using, but I would trust a financial services outfit to get their numbers correct more than any blog to write perfect prose.
February 8th, 2010 at 11:54 am
A friend at work switched to ATT and the iphone from Verizon and a Blackberry. She said ATT is fine with no problems and the iphone is great. That was a year ago. Now she is using a Blackberry with Sprint. That says more than this ridiculous article.
February 8th, 2010 at 12:03 pm
60%of the time, it works..every time.
February 8th, 2010 at 12:31 pm
I’m predicting about a 100% probability that I won’t care if Apple opens the iPhone to non-AT&T carriers. My iPhone and AT&T work fine. Been a customer of the others in the past and really can’t see any reason to switch.
February 8th, 2010 at 12:35 pm
Take this as being purely speculative and based on nothing more than rumor…
Our VZ corporate rep has been told that they won’t be getting the iPhone until AT LEAST 2011.
February 8th, 2010 at 12:41 pm
I think AT&T got apple by the balls with the sweet 39.99 unlimited data deal for the ipad!! I don’t see Vzw ever doing that!! With that said apple would just keep the iPhone longer with AT&T because of this great contract deal between the two companies which shows a great business relationship!!
February 8th, 2010 at 12:48 pm
I been having AT&T for 4 years now and got the iPhone last year and I have zero problems I have a jb 3 gs and I love it I am very satisfied with apple and AT&T
February 8th, 2010 at 2:05 pm
My stance been, and continues to be, AT&T will keep the iPhone this year and when the exclusive nature of this bargain expires, it will not be Verizon that gets the prize. A new iPhone would have to be designed to work on Verizon’s network, and although that might be good for first time iPhone users, I know dozens of people who will want to go to another carrier with their iPhone when AT&T finally releases their grip. Are these people expected to buy another identical iPhone JUST to change carriers? No. So you have to make the idea of upgrading phones to change carriers seem like a B.J. from God himself. Apple can do that, but the iPad will take any significant changes from the iPhone this year. However, next year you can expect to see a device that will be unlocked and usable on a number of carriers. I’m expecting AT&T to continue carrying them along with T-Mobile grabbing a chunk of the pie. From there, CDMA folks on Sprint and Verizon both should see something head their way. I just don’t see it this year though, because right now there just isn’t a good reason to do it. Not from a business perspective anyway.
February 8th, 2010 at 3:31 pm
Honestly, I don’t see why Apple would even make a CDMA iPhone. Its pointless when everyone is leaving that technology. Apple is not stupid they are very smart when it comes to contracts and exclusive deals. Money!!! There’s only two carriers that stay out of the red and that ATT and Verizon. Those are the only two competitors that can afford to have the iPhone. Having the iPhone on multiple carriers would not help the iPhone. Too much choice isn’t always a good thing. Your cheap sprint and t-mobile plans will change to be more pricey to meet apple standards. I don’t really see AT&T letting go of the iPhone. That’s there bread and butter phone. AT&T also made a promise to Apple to fix their networks and are sinking 18 billion into updating towers. Verizon’s LTE is still a least a year away for phones. It’s either going to stay AT&T or be on Verizon. Unless apple just sells it unlocked?
February 8th, 2010 at 3:41 pm
I think Apple will stick with AT&T. I for one wouldn’t mind. I’ve had no problems with AT&T. I’m happy staying where I am. I live in NYC and haven’t had any coverage problems. Those “Maps” on the V commercials stating that AT&T has less 3G coverage are from August.
February 8th, 2010 at 4:39 pm
Here is an idea… maybe Apple will screw both ATT and Verizon and becomes its own wireless provider. That would be genius.
February 8th, 2010 at 5:44 pm
Vz baby
February 8th, 2010 at 5:46 pm
1) When Apple had zero leverage, they would not adapt to Verizon’s terms. 2) Three years later, Apple has a ton of leverage, and you people think now they would? That defies logic. Apple will release an iPhone on Verizon on Apple’s terms, or not at all. Still, it is always fun to read people who treat every mention of Verizon like garlic to vampires. Its a fecking phone company, folks, thats it. Even if they do build and release a CDMA phone for Verizon, it will not change your AT&T phone, except maybe to release some network congestion. Blue AT&T, Red Verizon — the only color that does or should matter to either company (or Apple, for that matter), is green.
So at least there is one person around here thinking about this logically.
Couple of points. CDMA spec does not allow data and voice bearer channels to be active at the same time. According to various sources the Droid does not have a problem with simultaneous voice and data so they must have found some way around this like using the data channel for voice(just a guess, ask some CDMA gurus I’m just a simple route/switch guy). But Apple would have to work this out as well. There may be caveats I am unaware of.
Apple is not likely to want to support parallel product lines, i.e. every model in both 3G flavors. So they would likely want to go with something like Qualcomm’s new CDMA/GSM chipset. But does Apple want to go through retesting a new radio chipset? This is not simple stuff. Think about all the Nexus 3G complaints right now or back when the iPhone 3G first came out.
What about when LTE starts to pick up in 18-24 months? They would then have to switch radio chipsets twice in less than two years. This time they would be testing bleeding edge stuff. The first CDMA/LTE chipsets are just now demoing at trade shows.
Everyone including Verizon sees how AT&T has become Apple’s lil’ *****(publicly anyway). Verizon is quite proud of their network, customer loyalty, and customer sat. numbers(read, they are the least hatted). I can see more than a few Vz execs being nervous about being turned into Apple’s next *****.
None of these are insurmountable but they collectively make it pretty unlikely in my view. If I have to take a guess, you’ll Apple will not take the plunge until LTE starts to take off and they can look at something along the lines of Qualcomm’s MDM9600 GSM/CDMA/LTE chipset which could in theory allow one iPhone for all networks, but that is still a few years off.
February 8th, 2010 at 5:49 pm
why did my html quote tags get stripped? how are you supposed to quote around here?
February 8th, 2010 at 8:50 pm
I want it opened up for one simple reason, AT&T has not 3G in my area. I live in a town of 12,000 and work in a town of 15,000 20 miles apart. No 3G in either. The closest 3G AT&T has is around 60 miles away. Verizon and Sprint both have solid 3G coverage here. With all the trouble AT&T is having they are spending all their money upgrading towers in already covered areas and not expanding. All that said I expect AT&T to keep it exclusive for the foreseeable future.
February 8th, 2010 at 8:53 pm
I think i just shat my pants because my mom came to me when i got home from school and said that sh was switching us to verizon! I hope my freinds will follow suite and piss the seat of my ***
February 8th, 2010 at 10:30 pm
Should be 100%
February 21st, 2010 at 7:16 pm
I agree that it will be pointless in creating a Cdma iPhone for the Verizon/Sprint. That market is too limited and pointless. T-Mobile could get it as it is Gsm/Hspa and would only require a frequency change. Other than that it has a larger international presence than AT&T and they have been rapidly expanding 3G coverage, having about the same footprint as AT&T in the USA. @ Mike up there, you sound like an idiot. Sprint cannot afford the iPhone, but T-Mobile is a wholly owned subsidy of D-Telekom in Germany and they have the iPhone there, so what makes you think that they cannot afford it? If they do get it, I am leaving AT&T because San Francisco is getting pathetic and I must have Gsm as I travle internationally.
March 19th, 2010 at 10:36 am
I have been reading everyones comment…. but I think some ppl have good views and somme ppl just going off he say she say but if u would do ur homework and look deeper Apple actually came to verizon 1st with the iphone but they did not want verizon to get any revenue off of it so verizon said NO and thts why the iphone is with at&t…. also its because of the iphone tht at&t has the customers they have also the moto driod can download the same apps as the iphone the only thing is tht we do not have itunes and the response time on it is also a lot faster look at the iphone if its suppose to be so great it has a 2.0 camera and a driod has 5.0 with flash come one and iphone is not all tht great. with the iphone at verizon or not with verizon…. at the end of the day verizon still will always be number one when they pull the numbers.