Cupertino (CA) – When Apple interim chief Tim Cook was asked about the exclusive relationship between Apple and AT&T during the company’s second fiscal quarter conference call, he responded that the carrier is the “best wireless provider in the U.S.,” citing the GSM foundation and noting that it is “a perfect fit for Apple” who plans to offer “one phone for the entire world.”
To be a worldwide provider, Apple has to work with technology that can be globally used and Cook pointed out that the CMDA technology, which competes with AT&T’s (or T-Mobile’s) GSM lacks life. Cook also stated AT&T “put the full force and weight of their company behind it. We’re very happy with the relationship we have and do not have a plan to change it.”
Though I would disagree with the statement that AT&T is the “best wireless provider in the U.S.,” simply because of the the lack of service area coverage, Apple feels its choice was the right one. Not only for now, but also for the future of the iPhone.
AT&T also needs and relies on the exclusive partnership. Since the launch of the iPhone 3G last July, AT&T has had nearly six million activated iPhone 3Gs. In the first quarter alone, 40% of those activations came from new customers.
During the call, Cook made sure to note that Apple chose Cingular (now AT&T) for an exclusive partnership for a reason. Apple wanted to work with AT&T in the United States due to its support for GSM, which is seen as the worldwide mobile networking standard that is utilized globally by most wireless phone providers around the globe. This support would allow Apple to sell the iPhone worldwide.
Currently, the iPhone 3G integrates support for UMTS service, the mobile network standard that all GSM providers are currently moving toward. This 3rd generation mobile network standard is managed by the 3rd Generation Partnership Project (3GPP) organization. AT&T is working to upgrade from the 3GPP release 5 network to incorporate improvements which have been made to the specifications of 3GPP.
Apple’s partnership with AT&T puts them ahead of other wireless carriers. As CMDA providers such as Sprint and Verizon Wireless try to move toward the next generation of mobile networking technologies, CMDA makes the transition much harder, and requires twice the development effort. “CDMA doesn’t really have a life to it after a certain point in time,” Cook said. So don’t expect to see the phone picked up by Verizon or Sprint in the immediate future.
The terms of Apple’s contract with AT&T are not publicly stated. H,owever many sources and insiders have claimed that the exclusivity ends in 2010. This rumor has led to predictions that the iPhone could potentially become available on the Verizon network soon.
