T-Mobile USA is very close to getting the iPhone in the fall, ending Apple’s exclusive relationship with AT&T, according to a highly placed source at the wireless company.
Talks between Apple and T-Mobile are at an advanced stage, our source says, and it’s 80 percent likely that the iPhone will be coming to T-Mobile in Q3.
The source works at T-Mobile but asked not to be quoted directly and to remain anonymous because they aren’t authorized to talk to the press.
T-Mobile’s parent company, Deutsche Telekom, which carries the iPhone in Germany, was able to influence, the source said. T-Mobile USA is the fourth-largest U.S. carrier with 33.7 million customers.
Apple’s exclusive contract with AT&T is reportedly ending this year, and many expect Apple to offer the iPhone to other wireless companies. Overseas, Apple has routinely added extra carriers when exclusivity deals in those markets expire.
Most pundits expect Apple to add Verizon Wireless, the nation’s largest mobile phone provider with 92.8 million subscribers. AT&T is the second-largest US carrier with 87 million customers. The major problem is hardware: Verizon’s network is based on incompatible CDMA technology. However, Apple is already working with chipset-supplier Qualcomm on a CDMA chip for the iPhone, according to Wired.
But some analysts think it would be a lot simpler for Apple to go with T-Mobile, even though the carrier has a third of the customers of Verizon. AT&T and T-Mobile are the two primary GSM carriers in the US, and the iPhone wouldn’t require major hardware changes. Indeed, many T-Mobile customers already use unlocked iPhones on the company’s network.
Perhaps more importantly, a switch to Verizon would require a major realignment of corporate allegiances. Verizon is committed to Apple’s main wireless rival, Google, and has spent the last year heavily marketing the search giant’s Android phones. Verizon routinely runs ads directly attacking the iPhone. The most recent attack ad mocked the iPhone 4’s “death grip.”
Several analysts see Apple moving to T-Mobile. Last month, Shaw Wu, an analyst with Kaufman Brothers, predicted the iPhone will come to T-Mobile because of its compatible GSM network. “We continue to believe that T-Mobile USA is the most likely candidate given its use of similar cellular technology as AT&T,” he wrote in a note to investors.
Doug Reid, an analyst at Thomas Weisel, has also said on several occasions that the easiest way for Apple to extend the iPhone market would be to offer the device to T-Mobile. “Apple wants to move away from exclusivity; T-Mobile would achieve this for Apple in the U.S.,” Reid told The Street. Reid noted the battle lines drawn up between Apple and AT&T versus Verizon and Google.
In fact, Deutsche Telekom’s CEO René Obermann already told the Financial Times that T-Mobile is getting the iPhone. “T-Mobile USA is hoping to start selling the popular smartphone later this year or next year,” he said.
One important point, to which I don’t have the answer, is whether the iPhone 4 is compatible with T-Mobile’s 3G network. Customers with unlocked iPhone 3GS are able to use T-Mobile’s Edge data network, but not the faster 3G, which operates on the 1700/2100 MHz bands. According to Apple’s specs, the iPhone 4 adds the 2100 band, but not the 1700 band, which has led some to conclude that it is incompatible with T-Mobile’s 3G network.
However, there is some debate whether Apple simply didn’t list the 1700 band, which seems to be the convention when listing such specs. And no one has yet tested the iPhone 4 on T-Mobile’s network. Despite the efforts of the Dev Team, there isn’t yet a publicly available unlock for the iPhone 4.
T-Mobile declined to comment. “T-Mobile does not comment on rumor or speculation,” said the company’s PR department in an email to CultofMac.com.
Apple didn’t respond to a request for comment.
Apple already tried to partner with Verizon before the iPhone launched. Apple offered the carrier an exclusive deal in 2007, which Verizon rejected over issues of software control and revenue sharing. The iPhone has been credited with AT&T’s robust growth these last few years.