Apple/AT&T 5 Year iPhone Exclusivity Contract Confirmed

Over the past few days, talks of an Apple iPhone coming to Verizon Wireless have intensified. However, nothing has been confirmed by the parties involved. Additionally, when the iPhone came out on 2007, USA Today originally reported that AT&T and Apple signed a five-year exclusivity contract, which has led many to believe that there is no iPhone for Verizon Wireless coming any time soon. That five-year exclusivity contract has now been confirmed by none other than Apple itself.

According to court documents submitted by the Cupertino-based company in a ongoing California Antitrust litigation filed back in 2007 against Apple and AT&T over allegations that both companies built an entire monopoly by making the iPhone exclusive to AT&T for five-years, and thereby keeping costumers within the carrier even after their two-year iPhone service contracts expire. Apple’s lawyers responded that the company never promised an unlocked iPhone after the two-year service contracts were up. The attorneys also confirmed over and over again that a five-year exclusivity contract exists between Apple and AT&T.

These are a few quotes by Apple from the court documents it submitted:

“The duration of the exclusive Apple-[AT&T] agreement was not ‘secret’ either. The [plaintiff] quotes a May 21, 2007 USA Today article – published over a month before the iPhone’s release – stating, ‘AT&T has exclusive U.S. distribution rights for five years-an eternity in the go-go cellphone world.’”

and

“[T]here was widespread disclosure of [AT&T's] five-year exclusivity and no suggestion by Apple or anyone else that iPhones would become unlocked after two years… Moreover, it is sheer speculation – and illogical – that failing to disclose the five-year exclusivity term would produce monopoly power…”

At this point, it remains unclear whether that five-year exclusivity contract still remains valid. Specially, since this lawsuit is still ongoing, and related documents have been sealed since 2009. If the contract is still valid, it jeopardizes the chances of the iPhone coming out on Verizon Wireless this year and the next. However, contracts can be easily amended, and sometimes even canceled. We will definitely find out soon whether Apple has decided to stay with AT&T until 2012, or if the company will make its iPhone available to other wireless carriers in the United States.

For more information, check out the Apple Brief and the Court Order, both in PDF format.

[ via Engadget ]