AT&T seeks to extend iPhone exclusivity contract until 2011

When the iPhone 3G launched last summer, customers at a number of Apple Store locations formed lines around the block that would often last for weeks. It's rare for consumers to display that level of interest dedication for any type of product, let alone for a phone, so it therefore comes as no surprise that AT&T is looking to prolong its exclusivity deal with Apple for as long as possible. The current battle among carriers these days is in attracting new subscribers, and to do that, a blockbuster phone is just as important as affordable rate plans. According to a recent report in the Wall Street Journal, AT&T CEO Randall Stephenson is currently in negotiations with Apple to keep the iPhone tied to AT&T until 2011. It is widely believed that under their current agreement, AT&T has the exclusive rights to distribute the iPhone until 2010. How the iPhone came to be exclusive to AT&T When Apple first launched the iPhone in 2007, it placed an un-precedented number of demands on AT&T. Typically, carriers dictate the rules to handset makers, and not the other way around. Apple, however, isn't your typical company, and in dealing with AT&T, it exerted an unusual amount of control over the way consumers would interact with the iPhone, and even how and where the phone would be sold. It has even been reported that AT&T executives never even saw the iPhone in action until it was unveiled by Steve Jobs at Macworld in January of 2007. Famously, Apple first approached Verizon about selling the iPhone, but Verizon balked at what they deemed to be too many demands from Apple. Soon thereafter, Apple found that AT&T was much more receptive towards giving Apple the control it wanted. But in exchange for ceding a significant amount of control to Apple, AT&T requested and was granted the exclusive rights to sell the iPhone. The iPhone has sold incredibly well, and has been an important catalyst for attracting new subscribers to AT&T. With a new and improved model set to launch in June, you can bet that AT&T is going to do all it can to keep the iPhone away from other carriers for as long as it can.

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