Apparently back in 2007, Apple signed an exclusive deal with AT&T to market and distribute the iPhone. Just now, we are getting confirmation that the iPhone exclusivity deal Apple signed with AT&T back in 2007 was good for 5-years.
In 2008, Apple’s legal team was in a courtroom in California over a a lawsuit which alleged that it was benefiting from an illegal monopoly over the iPhone, saying that AT&T’s 5-year exclusivity would really require iPhone owners to re-sign with AT&T for an additional 3-years after their initial 2-year contract had expired. Apple responded with this:
Moreover, it is sheer speculation –- and illogical -– that failing to disclose the five-year exclusivity term would produce monopoly power, i.e., would allow Apple, a brand new entrant in cell phones, to “exert raw power in the aftermarket without regard for commercial consequences in the foremarket.”
So is the contract valid? If it was signed in a courtroom, so sure it’s valid. But that’s not to say that it could not be amended or cancelled if any breach from either parties consideration was not fulfilled wholly or partially.
Additionally, the two companies recently met to hammer out the iPad’s pricing plans, and there’s no way of knowing whether that deal involves the iPhone as well. But it’s nice to finally know for certain that AT&T’s initial iPhone exclusivity period was negotiated until 2012. News will follow whether we will see the iPhone stay at AT&T until then, or whether iPhone and Apple will expand their horizons with the Big Red V, (Verizon).
Published on May 12, 2010
