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 atlmann10 on 5/11/2010 1:41:35 PM , Rating: 3
Apple is screwing themselves just like the PC Vs. Apple fight, or apple demise. Yes they have there app store and mobile devices now. If they don't wise up, and fast they will be in the same position as they were in the previously mentioned market segment.

As a market player (computer wise) Apple deals to a very specialized and small compared market segment. The decisions they have and are still making with the i platforms is the same. Therefore the outcome will be the same in the end. Blackberry still holds the number one spot. Android has overcome iPhone, and is chomping at Blackberry now.

Apple is locked in to a solo provider who inherently makes questionable market decisions and has for years. Do not forget Verizon started as a developmental division of At&t, but left them because they refused to be innovative basically, and have now outdone them in market capitalization as well as coverage map considerably.

The Android platform as other have mentioned is open, and does not require the ridiculous closed platform requirements Apple now demands. So I would say when 4G hits, and equipment like the EVO hits the market, both Apple and At&t market hold will start to erode.

If Sprint's network can handle the large amount of traffic they are about to get they will move up over At&t. Then it will be the current market leader number one with Verizon eating at that market percentage. At&t loosing share, but implementing changes slower than anyone. Sprint nipping at their tales (and over them most likely before the year is out, and T-mobile (who is supposedly implementing 4G now) nipping at them in two years I bet At&t will be number 4 or 5 on market capitalization.

This will in the end, and because of Apple's wise decisions mean Apple will be dropping like a rain drop from a cloud quarter after quarter. In the end there decision to remain closed as they have done for years, but cool looking will equal the same thing. Apple will again become a small market player.

Let us also not forget that HP just bought Palm, and is projecting (as are many market players) to have a very competitive tablet on the market by years end, not to mention new smart phones as well. This all erodes Apple's market. In the end much like 5 years ago all they will have are fan boy's and girls as all there market share.

The iPhone bubble will burst because of Apple and Mr Job's wise decision's as has been demonstrated before with superior (IIE) product, at that time in the market.

"Well, there may be a reason why they call them 'Mac' trucks! Windows machines will not be trucks." -- Microsoft CEO Steve Ballmer

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