Apple Appears Ready To End AT&T iPhone Exclusivity

Apple Appears Ready To End AT&T iPhone Exclusivity

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Apple’s iPhone has been a boon for AT&T, the only cell phone carrier allowed to market the phone. Since its introduction in Summer 2007, the iPhone has been a hot seller, helping AT&T to grab 43 percent of smart phone customers in the US, well ahead of its second place competitor, Verizon, who holds 23 percent of the market.

Next Gen iPhone

talking headAccording to the March 30, 2010 issue of “The Wall Street Journal,” Apple, Inc. is planning to bring out its next generation iPhone this summer and expects to allow other US phone carriers to sell its smart phone then too.

Apple has been updating its phone annually and promises that with its next release the iPhone will run on the CDMA network used by Verizon, Sprint Nextel and several operators overseas including those in Japan and South Korea. Right now, the iPhone runs on GSM, used by a significant majority of cell phone companies globally.

Cell Phone Profits

The iPhone has allowed AT&T to charge much higher rates for its data plans. The phone company pays Apple about $600 per unit, but turns around and sells them to customers for just $199.

AT&T can quickly make up its losses by having customers sign an extended contract and pay for costly service plans. That benefit has pretty much eluded Verizon and other competitors who do not have a product that can compare to the Apple iPhone.

Google Threat Looms

Apple’s decision to expand the iPhone to other carriers comes as the company follows the development of Google’s Android operating system for mobile phones. According to the March 30, 2010 issue of the “San Francisco Business Times,” Android was the fastest growing system over the past year. Android now controls 24 percent of the market behind Apple who has just over one-half of the market.

Google’s operating system is used by a number of companies in their phones. The Verizon Droid and the Nexus One by Google are two of the more popular Android powered products currently on the market.

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Photo Credit: Yamamoto Ortiz

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