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Signs that iPhone exclusivity coming to an end in US

In the recent month we have seen 2 new mobile operators getting Apple iPhone distribution contracts in the UK, and Bell has ended the iPhone exclusivity in Canada, which now leaves the US as one of the top iPhone markets yet to put an end to iPhone network exclusivity. But there are signs that things might change in the near future.

When Apple first launched their iPhone it was in a market where smartphones were still a minority and the interest for them was lackluster and not at all mainstream. It made perfect sense for Apple to give the iPhone exclusively to one network, as they both in a sense was making a gamble, although a small one, but for Apple it secured income beyond selling the iPhone itself. Since then the market has changed dramatically, with smartphones being developed by every major mobile operator, and competition increasing both in terms of handsets as well as the technology that sits behind them. The iPhone has opened up the smartphone market and made it mainstream, and competitors are following closely.

The popularity of the iPhone is now beyond a single network, and the threat of substitutes are increasing, making it important for Apple to reach a wider market as not everyone is willing to switch to AT&T to get an iPhone if they can get a Palm Pre or an Android phone on their preferred mobile operator. This is why Apple has taken the steps they have to open up the distribution in both the UK and Canada, and it is why the US will soon follow.

Apple’s business model is still very much reliant on the hardware bringing in the big earnings, but with the increased popularity of the iTunes App Store etc. It is starting to become an important revenue stream for them as well, allowing them to think about strategies for widening the market for the iPhone, and that can best be achieved through getting more mobile operators in place. They also need to think about taking advantage of their market position at the moment with competitors breathing up their neck with better and better handsets and incremental offerings through app stores of their own.

A sign that a change in iPhone distribution is imminent in the US is the rumor that AT&T will get the distribution of the Dell Android smartphone. It was shortly after the announcement that O2, who had the exclusive distribution of the iPhone in the UK, would also get the exclusive rights to the Palm Pre that the announcements came that both Orange and Vodafone would get iPhone deals in the UK as well. To be fair, there are quite a lot of Android phones in the market at the moment, and plenty more to come, so it is perhaps not a surprise that AT&T would get one as well, but we are talking about Dell’s first foray into the mobile phone market.

The move from AT&T to open up their network for VOiP on the iPhone is another sign that they might be positioning themselves against the market opening up for the iPhone, making sure they have a competitive offer and advantage when the announcement comes that Apple will be handing iPhone distribution rights to other mobile operators in the US. My guess is that this announcement will come before the end of the year.

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One Response to "Signs that iPhone exclusivity coming to an end in US"

  1. Crasty says:

    In truth, immediately i didn’t understand the essence. But after re-reading all at once became clear.

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