Apple's iPad wireless service to be unlocked, partnered with AT&T
From Washington, the most interesting part of Apple's iPad tablet announcement was that the company was again partnering with AT&T to carry wireless Internet service for the device. And analysts are touting the partnership as a big win for AT&T, which has enjoyed a boon in subscriber growth from iPhone customers.
But this time, the device will be unlocked. What that means, we believe, is that a user can bring it to other GSM network operators like T-Mobile USA. But by partnering with AT&T, the vast majority of users will likely be subscribers of the carrier, analyst said.
"With today's announcement that the iPad will operate on (AT&T's) network (no indication on exclusivity), the company is likely to maintain its position as a device leader," Jeffries & Co. analyst Jonathan Schildkraut said in a research note.
The move comes after consternation by some iPhone users of network congestion on AT&T, Apple's exclusive partner on the phone. By unlocking the iPad, Apple is moving in the direction of Google with its Nexus One phone, which it said would be sold unlocked and would run on both GSM and CDMA networks.
The whole debate over handset exclusivity contracts has been a thorny one for regulators. The Federal Communications Commission is reviewing the practice as part of a bigger look into competition in the wireless industry. Smaller wireless carriers like Cellular South complain that the deals are anti-competitive because they leave companies like theirs with less attractive offerings than the biggest wireless Internet service providers.
AT&T, Verizon Wireless and other argue that the deals help them distinguish themselves over competitors. You buy the iPhone or the Palm Pre for the device, not necessarily because you want to go to AT&T or Sprint Nextel, analysts say. And the phone makers like the predictability of selling their phones to a captive subscriber base held by the carriers. It's gravy that the carrier markets and sells the phones, picking up those costs.
January 27, 2010; 2:28 PM ET
Categories: AT&T , Apple , Mobile
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