AT&T secures iPhone exclusivity through 2010

There’s no doubt that AT&T (NYSE: T) has been milking its iPhone cash-cow for the past year or so. The iPhone has single-handedly broadened many consumers’ perspectives on what kind of user experience to expect from a smartphone, not to mention sparking a world-wide touchscreen revolution that no touchy-feely handset before it has managed to inspire.

In that light, it makes sense for AT&T to want to stay in cahoots with Cupertino’s Steve Jobs. AT&T CEO Randall Stephenson and Steve Jobs worked together to bring the iPhone 3G down to the sub-$200 sweet-spot that has proven to be the perfect price-point to bring the iPhone to its highest market share in a year. The deal has AT&T paying Apple (NSDQ: AAPL) about $300 per iPhone 3G handset in order to make the price-tag more attractive to eager customers willing to sign on to a more expensive rate plan (especially the highly-lucrative unlimited data plan) for two-years.

Customers are scrambling to get their hands on an iPhone 3G, leaving Apple’s own retails stores struggling to keep up with demand - AT&T stores are back-ordered for weeks. The demand for the iPhone 3G seems to be going strong after more than three weeks on market, and the flood of new customer sign-ups likely has AT&T dizzy with revenue projections. AT&T isn’t about to let that kind of subscriber inflow die down anytime soon.

With the iPhone set to be offered to other carriers in the US in 2009, AT&T moved to extend their exclusivity agreement in to 2010. The US wireless market is quickly becoming saturated, and that means carriers have to do everything they can to maintain a competitive edge against their rivals. AT&T’s exclusivity on the iPhone is just such an edge, and the company isn’t looking to give that up any time soon.

In the US, AT&T will be the only game in town for the iconic iPhone 3G. And, if Stephenson has anything to do about it, we’ll be seeing the iPhone 3G boost Apple’s mobile market share to new levels.

[Via: USAToday]