Does AT&T have an exclusive iPhone contract till 2012?

Aside from the world supposedly ending in 2012, that's the same time the exclusive contract between AT&T and Apple is due to end over the iPhone.  Apple and AT&T locked in an exclusive contract back in 2007, when the first iPhone launched.

A California class-action lawsuit filed back in 2007 says that Apple and AT&T illegally exerted a monopoly over the iPhone, requiring customers be locked into a 2-year contact, when the exclusivity deal between Apple and AT&T was actually five years.

This forces customers to resign with AT&T after their contract was up, rather than allowing them to switch carriers - if they wanted to keep using the iPhone.

From these selective quotes from engadget via Apple:
"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."
...
"[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...
"

The question remains if the deal between Apple and AT&T is still valid.  The lawsuit is still on-going, and Apple has a hit on their hands, something that is limited to the worst ranked carrier in the United States.  AT&T still has yet to enable tethering for the iPhone.  Many customers still eagerly waiting for Verizon to carry the iPhone in the US, which could happen if the rumours of a CDMA iPhone 4G/HD are true.

The United States is one of very few places around the world that still has an exclusivity deal over the iPhone.  Countries like Canada and United Kingdom already allow for multi-carriers, but the United States remains locked down.

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16 Comments

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I *honestly* don't have problems with AT&T's service, although I'd be the first to drop if the iPhone goes to Sprint. If it was to go to Verizon, I wouldn't! To me there quality of service is worse than AT&T's! There, I said it! I have better sound quality and 3G that works faster than Verizon's!

I could have sworn I heard Jobs or a speaker at the iPhone keynote state it would be 5 years. I remember that because I always thought it sounded like a long time to be exclusive, I need to track down that video.

Chrono951 said,
Perhaps the contract only applies to certain versions of the iPhone and the next gen version will be exempt.

That's an interesting thought. I'm not sure how a contract could be broad enough to cover all previous versions of the iPhone, but exclude this upcoming one though... I don't think this would work out in the end. And I'm sure it would be tied up in lawsuits if Apple attempted to argue this as well... The iPhone IS AT&T's money maker at the moment after all...

Not sure why they just wont come out and say when the contract will end? Why all the secrets? To keep people from waiting with other cariers for the iPhone?

bankajac said,
Not sure why they just wont come out and say when the contract will end? Why all the secrets? To keep people from waiting with other cariers for the iPhone?
I think that's exactly it. Apple / ATT doesn't want people (like me) who are waiting for the iPhone to go to Verizon to give up on waiting and go with Android or some other smart phone. If I knew definitively the iPhone wasn't coming to VZW for another 2+ years then I'd have a new Android phone next week. Instead I'm keeping hope the iPhone will finally get away from that crappy AT&T network sometime this year.

dvb2000 said,
What's the big deal? After 2 years they aren't on a contract.
Because he doesn't want to use AT&T? How is that hard to interpret?

Kirkburn said,
Because he doesn't want to use AT&T? How is that hard to interpret?
Me neither. I want an iPhone but refuse to use AT&T. I have too many friends with iPhone / ATT and they have tons of complaints while I have a BB Storm on Verizon and no complaints. I think I've had 4 dropped calls in the past 3 years.

Oh well. Hopefully this is all B.S. and Verizon will have the iPhone this year.

Edited by Tim Dawg, May 12 2010, 3:12am :