AT&T Switches To Subsidizing In Exchange For US Exclusivity Until 2010?

We knew from early on that AT&T had agreed to pay Apple in exchange for exclusivity in the US after which the iPhone would be unlocked, but the exact date that their deal would expire has remained a mystery until today. Similarly, little is known about why AT&T changed from their previous payments to Apple to heavily subsidizing the devices. In what is a rare peak at the inner dealings between Apple and a carrier, USA Today claims to have inside information on both subjects.

According to the publication, AT&T agreed to switch to the subsidization model for the devices, but only under the condition that they would be able to keep their exclusivity until 2010.

AT&T CEO Randall Stephenson has declined to comment on the subject, but he did say that he believes that $199 is the ideal price for the device, and that it will benefit both companies.

“The $199 price point is where demand leaps,” according to Stephenson. “This is going to bring in a whole new demographic.”

Currently, long-term growth is their focus, as they estimate that iPhone 3G subscribers will most likely pay around $100 per month for voice and data (although that seems a bit high to me), whereas most other subscribers average about $55/month.

The change in subscription is both good and bad for customers. It’s good because the iPhone 3G is now much cheaper than the original iPhone. Unfortunately, it also means that it will remain locked to AT&T until 2010, whereas it apparently could have been unlocked as soon as next year otherwise.

Not surprisingly, AT&T says they’re “very happy” with their current partnership.

“You don’t [push forward] by making little incremental moves. You’ve got to make big moves,” he explains. “You’ve just got to be right more than you’re wrong.”

[via USA Today]

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