In the last three months, AT&T (NYSE: T) has activated 3.2 million brand new Apple Inc. (NASDAQ: AAPL) iPhones. 1.7 million of those iPhones are iPhone 4s, the latest (though decidedly not the greatest) model of Apple Inc.’s monumentally successful smartphones. But if Deutsche Telekom subsidiary T-Mobile has its way, it could be the next carrier in line to carry the much vaunted iPhone – despite rumors of a Verizon (NYSE: VZ) alliance.
AT&T has said that pre-order rates for the iPhone 4 were ten times higher than for the iPhone 3GS when it released last year. In fact, the pre-release demand of the iPhone 4 was so high that that users crashed AT&T’s website for the device.
At first blush, it seems like a no brainer that Apple has publicly stuck to its exclusivity agreement with AT&T despite calls for a Verizon iPhone. The iPhone has been available to the public for three years now, and the sales numbers here in the United States seem to say that Apple’s been right to dance with the one who brought them to the cellular ball. On the other hand, though, consider this: of the 3.2 million iPhones AT&T’s activated since April 2010, only 860,000 of them have been for brand new customers. Sure, Apple’s selling iPhone 4’s like gang busters, but when less than one-third of the iPhones getting sold today are reaching customers who don’t already own a version of the device, it’s hard to argue that real growth is taking place.
Stagnation at AT&T is just one of the many signs that Apple will start selling a model of the iPhone through another mobile service provider before the year is out. The likeliest contender has seemed to be Verizon. Hints have been coming from all over the tech and business worlds since this past January that a Verizon iPhone was due by Spring 2011 at the latest, some of which came directly from Verizon CEO Ivan Seidenberg. (Seidenberg, when asked about Verizon support of the iPhone last January, responded that Verizon had laid the groundwork for the device with their other smartphone offerings.)
In an unlikely twist, it’s starting to look like the iPhone will be available on the world’s seventh largest cellular service provider rather than the first. Popular Apple Inc. website Cult of Mac published a rumor yesterday that Deutsche Telekom’s T-Mobile would begin offering a version of the iPhone by Septemeber 2010. The rumor was confirmed by a “highly placed source” inside of T-Mobile, and that the smartphone’s release had an “80%” chance of happening prior to this coming holiday season.
While it might seem strange that Apple would begin their expansion into the rest of the cellular service market with a company markedly smaller than competitors like Verizon and Sprint, there is technological evidence that T-Mobile would be a logical choice. T-Mobile’s 3G network isn’t confirmed to be compatible with the technology in the new iPhone 4, but the company’s UMTS system (its Universal Mobile Telecommunications System that operates its “3GSM” network) uses a 1700MHz frequency band. The iPhone 4 doesn’t officially use the same frequency through AT&T, but the current tech has the potential to utilize it. Verizon and Sprint, on the other hand, do not use the same frequency.
Whether T-Mobile, Verizon, or someone else ends up being the first to share the Apple love with AT&T, it’s a guarantee that all eyes will be on Apple throughout the rest of the year. The iPhone 4 is performing well for them and AT&T both, but with the declining numbers in new customers and the persistent rumors regarding iPhone service with a new provider, its all but guaranteed that an announcement will come soon rather than later. As they say, where there’s smoke, there’s fire.
As of this writing, Anthony Agnello did not own a position in any of the stocks named here.
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