Fueling speculation that an unlocked iPhone is in the cards, Oppenheimer telecommunications analyst Tim Horan predicted Monday that Apple will not renew its exclusive agreement with AT&T when the wireless carrier’s contract expires in May.
“We believe AT&T’s iPhone exclusivity arrangement with Apple will be expiring by mid-2010,” Horan wrote. “For wireless carriers, customers are demanding the device and they need to remain competitive.”
AT&T has been the exclusive carrier of the iPhone since its debut in 2007.
Horan sees an Apple agreement with T-Mobile as soon as this summer, followed by deals with Verizon Wireless and Sprint Nextel in the fall and Clearwire in 2011.
Impact On Bottom Line
But that won’t mean instant profits for those carriers: Subsidizing the iPhone’s cost and market it with their voice and data plans will be costly, while upgrading networks to cope with the increase in data usage may cost the industry $3 billion.
Apple, on the other hand, would see an increase of millions of units sold annually, to $25 million.
Currently, the most widely marketed unlocked phone is Google’s Nexus One, released last month, which sells for $579, or $179 with a two-year T-Mobile plan. The unlocked version is being sold directly through Google.
Ramon Llamas, senior mobile device analyst for IDC Research, said Apple is likely paying close attention to sales of the Nexus One.
“You can be sure Apple is looking closely at how Google is making a run of it, and if they are not looking at it for innovation, you can bet they are looking at distribution,” Llamas said. “Don’t underestimate the number of people who will go into Apple stores or who shop directly from Apple.”
But Llamas isn’t convinced the unlocked iPhone is inevitable. “There are rumors,” he said. “But in our research we haven’t heard anything to suggest that Apple is looking at…
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