Are Apple And ATT&T Over?

All relationships have ups and downs, arguments and misunderstandings, it’s a fact of life. And just like a relationship, technology industry leader Apple and mega cellular corporation AT&T are no different. Since the iPhone was first released in the summer of 2007, Apple and ATT&T have been working with and against each other and with rumors floating around the Internet that Apple was shopping for a new business partner it late last year and escalating for the passed few weeks, it seemed as though this relationship was over. But recent events and accounts say different.

The Internet bloggers and reports were positive that the newly unveiled Apple iPad was going to be partnered with cellular company Verizon Wireless and was sure that the iPhone would follow shortly after. But to many people’s shock and surprise Steve Jobs announced that the iPad would be provided 3G service from Apple’s long time partner AT&T at the Apple conference on the 27th of January early this year. Now, to top it off analyst Jonathan Chaplin of Credit Suisse, believes that there is a “75% probability” that AT&T will retain the exclusive iPhone contract for another year, out bidding rivals Verizon Wireless.

“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 writes. “We think this has profound impacts for Apple, the carriers and the other handset OEMs. We arrive at this probability through a two step process: First, we try to determine whether the Apple / AT&T agreement expires in 2010. The consensus view is that it does; however, we couldn’t find compelling evidence that this is the case. We conclude that there is only a 50% probability that it ends in 2010. Next, we try to determine whether AT&T bids for another year of exclusivity if exclusivity does end in 2010. We conclude that they would and that 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.”

However this relationship goes I’m sure Apple will be making the decision that’s best for them and their customer’s.