Print 38 comment(s) - last by Xarthos.. on May 25 at 11:34 AM

  (Source: The Huffington Post)
Apple may still try to squirm its way out of exclusivity

Those who follow the smartphone industry knew that Apple and AT&T had a very tight contract with the iPhone which has compelled the electronics maker to stay AT&T exclusive to date.  However, it was unclear just how long that contract was good for, until now. According to unsealed court documents uncovered by Engadget, AT&T has exclusive rights to sell the iPhone in the U.S. until 2012.

The documents come from a California antitrust class action lawsuit.  The plaintiffs claim that Apple attempted to create an illegal monopoly in 2007 when it failed to reveal that the secret deal would make it impossible for them to transfer their phones to other carriers in 2 years, without unlocking.

The case also accuses Apple of antitrust violations for blocking third party applications, a concern that still exists thanks to Apple's blocking of Flash and Flash ports, actions the U.S. Federal Trade Commission is currently examining for antitrust violations.

The court documents read:

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...

While the contract with AT&T is surely tight, it's possible Apple could payoff AT&T to cancel the contract, attempt to amend it, or declare it breached and fight it out in court.  There's a very real possibility, though, that it will simply stick it out till 2012, which would mean that 3 more years, and the next two iPhone models would be AT&T exclusive (in the U.S.).

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By Abrahmm on 5/10/2010 7:56:31 PM , Rating: 5
That is really a shocker! So much for the rumors of a Verizon phone.

This is probably the best thing that could happen to Android! By the time this contract is up, Android will be dominating the market.

RE: Wow!
By bbomb on 5/10/2010 7:58:10 PM , Rating: 2
Yup and since Apple seemingly refuses to allow AT&T to have any other comparable smartphone, AT&T may have screwed up big time.

RE: Wow!
By akugami on 5/10/2010 11:01:20 PM , Rating: 2
I think it really depends on what's in the actual contract. There could be enough wiggle room for Apple that they can create an OSX phone, even though the iPhone is just that, and claim compatibility with iTunes and iTunes apps. With slight differentiation, branding, and a lot of marketspeak it'll look like a whole new product/brand when everyone and their mother's goat knows it's an iPhone. It'll still sync with iTunes, use the same app files, have pretty much the same OS and interface.

RE: Wow!
By Omega215D on 5/11/2010 3:34:29 AM , Rating: 4
After playing with the HTC Incredible all I have to say is "what iPhone?"

“Then they pop up and say ‘Hello, surprise! Give us your money or we will shut you down!' Screw them. Seriously, screw them. You can quote me on that.” -- Newegg Chief Legal Officer Lee Cheng referencing patent trolls

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