Apple iPhone and AT&T
The Apple iPhone and AT&T, is exclusivity a good thing? The answer to the
question depends on what side of the market you fall. If you are a consumer,
exclusive agreements are rarely a good thing. On the other hand, if you are a
retailer or provider of services, exclusive contracts can help increase profitability
and market share. Here is a discussion of both sides of this coin.
Apple entered into an agreement with AT&T so that AT&T is the official and
exclusive provider of cell phone service for Apple's highly coveted iPhone. If you
happen to be Apple or AT&T this is a great thing. Apple makes money off of the
sale of every iPhone and it collects royalties from AT&T for every cell phone
contract sold to an iPhone user. Not a bad deal for Apple. AT&T profits because
in theory every Apple iPhone sold will have to activate an AT&T cell phone
agreement. Nice piece of the cell phone service pie for AT&T. As far as these
two companies go, there is a lot of money to be made from this agreement.
Furthermore, it saves Apple the hassle of having to make different phones or
different SIM cards for all of the major cell phone service providers. From the
perspective of Apple and AT&T this is a great arrangement. However, this
agreement of the Apple iPhone and AT&T has opened up the door to a massive
hacking movement. I am not sure that this is such a bad thing for Apple, although
they claim different. Owning and using an unlocked phone is a status symbol in
itself. A way of "sticking it" to corporate America. Apple may just be selling more
phones because of this. It is free and effective advertising resulting in sales for
Apple. I'm sure AT&T does not appreciate the hacking, as they have nothing to
gain from it. This is the corporate end of the Apple iPhone and AT&T equation.
What does the exclusive agreement with the Apple iPhone and AT&T mean to
the consumer? It means that there is a limited way of acquiring this phone. If you
already have a relationship with a cell phone service provider other than AT&T
and do not wish to change, then owning an iPhone is going to be difficult. What if
you love the iPhone's music and content features but do not want to use it as a
cell phone. The Apple iPod does not offer internet access. One of the main
selling points of the iPhone is internet abilities and music functionality. If you love
MP3's, videos, TV shows, and movies then the iPhone is a dream come true.
However as soon as you go to open up your iTunes account and plug your
phone into your computer you will be asked to sign up for AT&T's cell phone
service with your credit card. If you do not pass their credit check or if you do not
want to use AT&T this limits you and actually excludes you from using the
iPhone. In this scenario the Apple iPhone and AT&T agreement is bad for
consumers because it limits free and open competition in the marketplace. AT&T
has no incentive to offer any deals on cell phone service to iPhone customers.
However, no one likes to be excluded not even once. Stating you have an
exclusive agreement is an open invitation to every hacker on earth to prove your
agreement is not exclusive and they will find a work around. This is exactly what
has happened and in this case the consumer may have a partial victory. There
are free unlocks available for your iPhone on YouTube for versions of their
firmware up to 1.1.3. There are software programs available for under $100 that
will unlock your iPhone in seconds, with just a few clicks. An unlocked phone will
work with T-Mobile and AT&T in the US or on any other standard GSM cell
phone network. All you will need ids the correct SIM card. In addition, with the
unlocks available, you do not have to use the cell phone service at all. You will
still be able to download content to your phone either via your computer or via
WiFi. Furthermore, you can get Skype VOIP service for your iPhone and get
around the whole cell phone issue entirely. This is how the Apple iPhone and
AT&T agreement has ended up. It looks like in the long run AT&T could be the
loser.