Analyst says Apple should dump AT&T exclusive deal

An end to Apple’s exclusive deal with AT&T could double iPhone sales in the US – at least that’s what Morgan Stanley analyst Kathryn Huberty says.

This prediction stems from the fact that the exclusive arrangement between the two companies limits the sales of iPhones.

Huberty says that when Orange lost its exclusivity deal with the iPhone in France, the phone’s market grew by an amazing 136 percent. She says that it might also become the case in U.S. when Apple finally ditches AT&T, especially in light with the growing dissatisfaction users have in the U.S. carrier.

However, the exclusive partnership with Apple and AT&T is an arrangement designed to benefit the two companies greatly: AT&T gets thousands (or millions) of customers, Apple gets a premium from the carrier’s service fees.

But although Apple earns a lot for every iPhone sold, it is also a known fact that the company is also earning a VERY handsome income in their App store with over two million downloads since it was first opened. That means lesser iPhones sold equals lesser Apps purchased.

So the question remaining would be whether Apple is willing to take that sacrifice. I bet we’ll find that out real soon. 😉

Source: http://tech.yahoo.com/news/pcworld/20091006/tc_pcworld/attiphoneexclusivityhangsonappstoreprofits