Friday, September 12, 2008

Bad Business Decision For Apple?

Apple Extends Exclusive Agreement With AT & T

I found this article on and decided to blog on it because I have been thinking a little about this. I have been wondering why Apple would choose to go exclusive with one carrier in the first place. Any thoughts on why Apple would make this business move given the high demand for the phones? From the article came a few thoughts I agree with (see below).
"If Apple made the iPhone available for AT&T, T-Mobile, and Verizon users, can you imagine the selling frenzy? The company would be at the center of one of the most monumental days in the history of technology. If the iPhone 3G can sell this well on one carrier, I can't imagine how well it would sell on the top three."

”While I don’t think Apple has little faith in its product, I do think this is a poor decision. The iPhone has a chance to become not only the dominant smartphone for the coming years, but also the first real powerhouse in mobile computing. By limiting the device to one carrier, it limits its potential to reach such goals.”
Any other thoughts on this?


  1. I don't think it is necessarily a bad decision..

    Think about it..

    If the iPhone went to every carrier, then Apple could sell a lot of phones.. ok... but at what margin? at what profitablity? are their manufacturing operations up to snuff to handle it? etc.

    If they keep it "exclusively" with ATnT, and ATnT offers them a "kickback" on a per phone basis... Then the Apple gets a higher margin, higher profits, and lower manufacturing costs, on a per phone sold basis.

    It's kinda like selling 2 phones for Apple.. 1: the phone, 2: the kickback...

    So, if they want to "introduce" the phone to market, and work out the software bugs, and get the feedback from customers, and basically dip their toes, rather than just jump in the deep end... then it makes good sense to me.

    Good Luck

  2. Maybe you are right. Maybe it was the best decision for them to take it to market cautiously.



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