Will iPhone/iPad Stay Exclusive to AT&T?

AT&T has long been the cause of complaints, fairly or unfairly, about the performance of its network. In what may be a rare peek at negotiations between apple and carriers, a prominent newspaper claims AT&T agreed to a hefty iPhone 3G subsidies on the condition that it remains the lone carrier for the handset in the US until 2010.

The rumors that Apple would be adding a second carrier this year were met with some excitement, even to the point that a Verizon announcement was expected at the iPad unveiling last month. When such an announcement didn't come - and, in fact, Apple announced a deal with AT&T to provide Wi-Fi and 3G services to the iPad - those rumors took a serious hit. Now, a financial analysts are saying they expect Apple to not only stay with AT&T, but that the exclusive deal might even be extended at least a year.

As struck before the original iPhone's launch, Apple's initial agreement for iPhone exclusivity had AT&T serve as the only US network for iPhones until 2009, or roughly two years after customers' contracts began. But to green light the subsidy -- which is described as "painful" and damaging in the short term -- AT&T allegedly insisted on an extension of the deal until 2010, when T-Mobile and other carriers could start offering the device.

The report explains that the deal very likely has its roots in AT&T's determination to hold on to its market share lead in a field where most every potential customer already owns a cellphone. As the only real choice for the company is to "steal" subscribers rather than attract completely new customers, the iPhone lineup is a bargaining chip that transfers customers from rival networks and keeps existing ones in line.

Unlike tech writers, financial analysts are paid large sums of money by people with even larger sums of money to get this stuff right. Obviously, nobody but Apple and AT&T execs really know what the future will hold, but the fact that the Wall Street types are saying pretty much the same thing at this point is a strong sign that AT&T is going to hang on to exclusivity for at least a bit longer.