Details surface on AT&T, Apple iPhone 3G deal

Among the changes in AT&T's updated deal with Apple are the end of revenue sharing and special plans for the iPhone, as well as a new requirement for phones be activated in-store.

The carrier, while confirming it will maintain its exclusive rights to the iPhone 3G, also confirmed Monday that it will no longer share revenues with Apple. Instead, as was rumored, the cost of the phone will be subsidized by AT&T.

Plans for data access will be the same as traditional smartphone plans for 3G: $30 per month for consumers, and $45 per month for business for unlimited usage. Currently, the iPhone data plan costs only $20 per month.

No doubt, the subsidies for what is expected to be one of the best selling phones of the year, will drag down AT&T's earnings. The company expects the new strategy to shave as much as 12 cents per share off its earnings this year, and continue to be a net negative through 2010.

Apple is also preparing to tackle unlockers head-on. AT&T distribution chief Glenn Lurie told Gizmodo that the two companies are preparing to change the way the device is activated.

Instead of activating through iTunes, users will be required to activate the device in-store at either a company-owned AT&T store or through Apple. Making matters worse for some is that there will be no online ordering -- all sales will initially be through the retail locations.

According to Lurie, the activation process takes about 10 to 12 minutes. This could add hours of wait time to those who camp out on the first day of sales to get their hands on the device.

Dow Jones Newswire added that the two companies are also working on ways to ensure phones stay on the AT&T network, including some type of penalty for those who don't activate their devices within 30 days of purchase.

AT&T will force any iPhone 3G customer to sign a new two-year contract regardless of his current contract status. In addition, consumers who purchased first-generation iPhones after May 27 will reportedly be eligible for a free upgrade to the new model. BetaNews has contacted Apple and AT&T for further details, which may be forthcoming.

21 Responses to Details surface on AT&T, Apple iPhone 3G deal

© 1998-2024 BetaNews, Inc. All Rights Reserved. Privacy Policy - Cookie Policy.