Analyst: Apple to offer iPhone on U.S. carriers within a year; replace cable with iTunes subscriptions

Analyst: Apple to offer iPhone on U.S. carriers within a year; replace cable with iTunes subscriptions

Summary: The exclusive single-carrier deals Apple has struck worldwide may be nearing an end. In his latest note to investors, Piper Jaffray senior research analyst Gene Munster suggests the iPhone could be available for carriers other than AT&T in the U.S. within a year.


The exclusive single-carrier deals Apple has struck worldwide may be nearing an end. In his latest note to investors, Piper Jaffray senior research analyst Gene Munster suggests the iPhone could be available for carriers other than AT&T in the U.S. within a year.

Munster takes on 14 "unanswered questions" of Apple (AAPL) in his note, addressing the company's finances, iPhone, iTunes, iPods and Apple's retail stores, according to AppleInsider. While much of this may be answered with Apple's planned September music-themed event -- in which a new iPod lineup is widely expected -- one of Munster's notes suggests that Apple will add new iPhone carriers in the U.S. with the debut of a new product in the summer of 2010.

Munster writes:

"For various reasons the company moved from an exclusive relationship with French wireless carrier Orange to a multi-carrier model. In France, the company now enjoys dramatically higher market share (in the 40 percent range vs. about 15 percent in ROW) than in countries with exclusive carrier agreements (such as AT&T in the U.S. where the iPhone has market share in the mid-teens). We believe Apple is seeing the increased unit sell-through more than offset the slightly (~10 percent) deteriorated economics per unit involved in non-exclusive agreements."

In other words, Apple may have reached a saturation point in convincing consumers to trade their carrier for AT&T, motivated by the iPhone's exclusivity on the carrier. No doubt that the latest iPhone 3GS was a runaway hit, but moving to other carriers could address consumers who will be pleased with the iPhone but don't think the AT&T network is worth the switch.

It's been rumored that Apple is looking to Verizon as a possible alternative. Meanwhile, AT&T is said to be continuing negotiations with Apple to keep the iPhone exclusive through 2011, according to the AppleInsider report.

In other words, it's a good thing to be the belle of the ball.

More takeaways from the note:

  • Munster does not believe Apple will offer another model below the $99 iPhone 3G.
  • Munster believes that Apple is dissatisfied with the current status of the breadth and availability of video content offered in iTunes.
  • Munster thinks Apple will eventually offer a monthly subscription offer for TV shows on iTunes; $30 to $40 per month, which could replace your cable subscription.

Related news: Apple's deal with China Unicom for the iPhone is officially not exclusive.

Topics: Smartphones, Apple, Hardware, iPhone, Mobility, Networking

Andrew Nusca

About Andrew Nusca

Andrew Nusca is a former writer-editor for ZDNet and contributor to CNET. During his tenure, he was the editor of SmartPlanet, ZDNet's sister site about innovation.

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  • THANK GOD!!!!

    Ditch AT&T PLEASE!!!
  • "Should never have been Allowed"

    AT&T Definitely needs competition. They are only gouging because they can. Exclusive deals are never good for the consumer. As it is, there are only two major cell phone providers which grab 70% of the market. AT&T and Verizon both overcharge for their services which use the public airwaves to make huge profits for their wealthy stockholders.

    Apple makes its money from selling overpriced hardware that's incompatible with everything else. Not good for consumers either.
    • Then don't buy!

      [pre]Apple makes its money from selling overpriced hardware that's imcompatible with everything else. Not good for consumers either.[/pre]

      Overpriced in your opinion. I have a Windows Mobile Phone that cost $250 with unlimited text/data and 700 minutes for $120/month. iPhone is cheaper than that.
    • class warfare and emotion

      Last I checked ATT couldnt "gouge" anybody. As others noted some WinMo smartphones and data plans cost more than the iPhone.

      Sprint used to have a much bigger part of the pie but then they started serving customers poorly and so people left. This is a sign that there is competition.

      So how much profit do they make or are you just making it up? What would you consider fair?

      PS: Verizon and ATT paid tons of money for their spectrum. Apparently our govt is greedy too...they wanted the most $$ they could get from the spectrum auctions.
    • Apparently, most cell phone users ...

      ... don't agree with you or AT&T and VZW wouldn't be fighting over first place.

      Same with Apple customers. There are choices out there that do not include these three players.

      When consumers demand that AT&T and Verizon lower their rates, they will - or they will lose customers.

      We pay our money and we take our chances but if we don't like the results, we can always go elsewhere when our contracts expire. Or we can buy a prepaid cell phone plan.
      M Wagner
  • Can you replace 'Analyst' with 'Munster'... future articles? Just so we know it's comedy before we hit the link.
    Sleeper Service
    • So when it's Gartner...

      "biggin' up" Microsoft's next big thing, it sound analysis? You are so
      transparent, it's laughable...
      • Gartner publish stats...

        ...Munster publishes suppositions.

        But thanks for playing!
        Sleeper Service
  • Replace cable with iTunes subscriptions

    That's pretty funny! I'd bet a week's pay that iTunes wouldn't take cable subscriptions down even 1 percent. The only place iTunes has made a significant impact on another media's revenues is in music CDs, and that's mainly because they were such a poor value to begin with.

    Basic and "bulk" cable subscriptions have two things going for them: they are cheap (relative to premium services) and they carry a huge range of programming compared to iTunes, including things like local news. With OTA digital transmission still quite iffy in many locales, cable acts as a lifeline service for so many households.

    iTunes main victims will remain the CD and DVD industry for some time to come. Its effect on both paid cable and unpaid file-sharing remains in doubt for the foreseeable future.
    terry flores
    • Agreed

      The biggest problem with people living in big cities, is that they think what happens there, happens everywhere.

      Unfortunate get a mile outside of a big cities, and watch your ISP services, and number of ISPs drop exponentially, to the point that your LUCKY to get ISPs without paying by your 1st born, and a leg.

      No, I wouldn't pay $40 a month for Itunes especially. $40 a month gives me about 50 cable channels (About 5 worth watching) as well as local news.

      A local wal-mart, and netflix rounds out what's good enough to watch.

      Besides I've yet to find anything on Itunes worth purchasing. Even if they'd get their heads out of their rumps and make a web site anyone can buy from. I prefer not to have to switch to Winders to use their bloated and bug-ridden ITunes. (Along with the security harzard Quicktime, Safari, and what ever else they push.)

      - Kc
      • Better yet, go the "free" route

        [i]A local wal-mart, and netflix rounds out what's good enough to watch.[/i]

        I've been ordering DVDs thru my local library. I just place a reservation, and most times, I get a notification to pick it up in about a week. I can order from any library in the state, and pick it up at my local library. New releases can put you on a waiting list for a month or two, but, being free, it has its limitations. And I refuse to step foot in Blockbuster.
        • People are willing to pay a premium ...

          ... for convenience. That's why bookstores are still in business. It's the same for most any industry.
          M Wagner
      • You see, bloated and bug-ridden are just clues

        that you really don't know what you are talking about.

        Really. You don't.

        iTunes has changed how the Western World bought it's music.

        Do you really think iTunes is so bloated and bug ridden? Why would
        the average person put up with that?

        Oh, wait, they do, they buy Windows!!!!

        Anyway, your analysis proves you aren't credible.
    • I think you are right ...

      Services like iTunes are competing with cable in households that are more affluent and more technologically literate.

      Today, basic cable is a commodity service offering OTA HDTV and legacy (down-converted)analog service for a few few cable channels.

      It makes up a large piece of the cable business - and probably will for some time to come.
      M Wagner
  • RE: Analyst: Apple to offer iPhone on U.S. carriers within a year; replace

    This is getting out of hand. This is the question that everyone
    should ask themselves before reporting speculation as real
    tech news. Did Apple say they were going with another
    carrier? If you can say yes to that question, then it should be
    reported as news. If you said no, then don't say anything
    about it due the the fact that you're influencing people
    spread rumors and not news.
  • RE: Analyst: Apple to offer iPhone on U.S. carriers within a year; replace cable with iTunes subscriptions

    Analyzing a market to have informed speculation is what analysts do. When the title says "Analyst", the reader knows exactly that it is such speculartion.

    There is nothing "getting out of hand" about it, except for the PR people for Apple/ATT trying to suppress free speech.
  • Too Late

    Apple should have done this in the first place. I'm currently on Verizon and I was dying for the iPhone, but Apple decided to be exclusive, which I don't think is fair, but it's their product. So they wait years then decide that they MIGHT make it non-exclusive. Well I'm sick of waiting, they should have done that a lot sooner to combat Google's Android. I plan on picking up the Motorola Sholes in October for Verizon. Apple lost a lot of customers by making that exclusivity deal with ATT.
    • I wonder if they would hire you?

  • Apple MUST make the iPhone available outside of AT&T

    Every time I get to use someone's iPhone, I want one more and more. Every time I get frustrated by a feature on my current phone, I want the iPhone more. But every time I use someone's AT&T connection and suffer a dropped call, I am reminded as to why I don't want AT&T. And every time I overhear a friend speaking with (and getting frustrated by) AT&T's customer support, I am again reminded about why I don't switch.

    So the battle constantly goes on in my head. How badly do I want the iPhone versus how badly do I want to keep away from AT&T (and stick with Verizon)? I don't know who is going to win this battle in my mind, but it surely would be an ideal solution for Apple to find a way to offer the iPhone through other carriers. It can only help Apple, not to mention all of us who are frustrated by not being able to get the phone we want with the carrier we want.
    • And that's the point of exclusive deals

      To get you to switch carriers to get the phone that you want. Some people value the device more than the carrier. Others value the carrier more.

      The question is whether or not Apple helped themselves or hurt themselves by signing on with AT&T. AT&T has to ask itself the same question. And VZW has to ask itself if it made a mistake by not signing on with Apple when Apple approach them first.
      M Wagner