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Friday, 18 September 2009

Will iPhone Go to Multiple U.S. Carriers in 2010?

Currently, Apple’s iPhone is only available through AT&T to American consumers. However, the situation is likely to change within a year, as analysts predict that Apple will be ready to end its exclusive iPhone deal with AT&T and follow a multi-carrier strategy in the United States beginning in 2010.

In its latest notes to investors, Research firm Piper Jaffray suggests iPhone might be available for carriers other than AT&T in the U.S., most likely following the launch of a new product in the summer of 2010. In fact, Apple has already embarked on this approach in France, where it decided to end its exclusive deal with wireless carrier Orange. The strategy is proved to be beneficial, as the company now enjoys 40 percent market share in France. By comparison, in countries with exclusive carrier agreements, like the U.S., the share of iPhone is only limited to the mid-teens.

Apple and AT&T are discussing the agreement at the moment and it is generally believed that the carrier would want to keep the iPhone exclusive through 2011. But Piper Jaffray also notes that for consumers, the bond with AT&T may be a deal breaker, since some of them are not satisfied with AT&T’s service and network. For Apple, it could be better to follow in Research in Motion’s footsteps to broader its distribution. With its BlackBerry available on multiple carriers, including AT&T, Verizon, T-Mobile and Sprint, Research In Motion indeed has a higher market share than Apple does.

As for the possible carriers of iPhone, Verizon appears to be the leading candidate. Backed in April, USA Today reported that Apple was negotiating with Verizon about making a new model designed for Verizon. Meanwhile, the carrier has been updating its data network to a faster 4G network called Long-Term Evolution (LTE), which is rumored to be ready next year. This means Apple could either reengineer the iPhone to support Verizon’s existing network or design a new one to work with LTE.

If this is really the case, iPhone lovers will soon have more choices when selecting the carrier that suits them best.

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