Report: AT&T, Apple to Extend iPhone Exclusivity

AT&T Inc. has leveraged the Apple iPhone to attract 1.6 million customers in the last half of 2008, and it can’t be blamed for wanting to hang onto a cash cow. So now, the carrier wants to extend its deal to be the exclusive provider of the iPhone in the United States – a deal that’s currently set to expire next year.

The Wall Street Journal is citing sources “familiar with the matter” that say chief Randall Stephenson is negotiating with Apple for an extension into 2011.

It’s all part of an overhaul to make wireless more of a central focus for the operator. “We have 77 million wireless customers and 30 million consumer phone lines,” Stephenson told the Journal recently. “Which customer base would you rather work from? We tend to come at this backwards.”

It’s unclear if there is sufficient reason for Apple to extend the relationship, seeing as it has taken the lead on advertising and support for the device from the beginning – a clear deviation from the traditional carrier-device model.

For AT&T, the exclusive initially didn’t mean as much, considering that the only other major network in the United States that the iPhone could function on would be that of rival GSM carrier T-Mobile USA. T-Mobile until recently was not 3G-enabled, but is now building out its 3G network and would be capable of bringing the full power of the iPhone to its subscribers.

Apple tends to go for exclusive relationships with carriers around the world, though there are some exceptions to that, in Italy, for example.

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