AT&T retains Apple glitz with iPad deal
From Reuters US Online Report Internet News | 2010-01-28 02:46:32
<div><p>NEW YORK (Reuters) - AT&amp;T Inc appears to have fended off Verizon Wireless for now and retained its status as the preferred U.S. carrier for Apple Inc with a deal to support the new iPad tablet computer.</p><p>The agreement, announced by Apple Chief Executive Steve Jobs on Wednesday, was seen as a coup for AT&amp;T after much market speculation that Apple would choose Verizon Wireless. AT&amp;T already is the iPhone's exclusive U.S. carrier.</p><p>Shares of Verizon Communications Inc, which owns Verizon Wireless with Vodafone Group Plc, closed down 0.99 percent at $29.87. AT&amp;T shares rose 1.14 percent to $25.62.</p><p>"It is a disappointment that it won't be available on Verizon Wireless," Piper Jaffray analyst Christopher Larsen said of the iPad. "AT&amp;T is going to get new customers that Verizon could have gotten had iPad been available on its network."</p><p>Apple said the most basic version of the iPad, a touchscreen multimedia gadget with short-range WiFi connectivity, will cost $499.99 for 16 gigabytes of storage. Consumers will have to pay another $130 for third-generation (3G) wireless capability.</p><p>The tablet will use AT&amp;T's mobile data services, with the carrier charging $29.99 for unlimited monthly access, or $14.99 for up to 250 megabytes of data a month.</p><p>Because AT&amp;T is not subsidizing the iPad's price, customers do not have to commit to any long-term service contracts, unlike iPhone users in the United States.</p><p>Larsen said the idea of offering unlimited data for a monthly fee without a contract would help spur consumer demand.</p><p>"It is a new way of doing business," he said. "I think it's going to attract a lot of customers to the product, the fact they don't have to sign a two-year deal."</p><p>Unlike the iPhone, Apple said the iPad will be "unlocked," which in theory means that other operators using the GSM mobile standard should be able to support the tablet.</p><p>But in fact, at least for now, only AT&amp;T's 3G service is ideal. The 3G service of Deutsche Telekom AG's T-Mobile USA uses different airwave bands so any iPad users on that network would have to put up with slower speeds.</p><p>Verizon Wireless and Sprint Nextel Corp use another mobile network technology that is incompatible with the iPad.</p><p>Apple said it hoped to have international wireless deals in place this summer.</p><p>In a wireless market where carriers are increasingly dependent on promoting the hottest gadgets to lure customers, to their service, a partnership with Apple is good news.</p><p>Jefferies &amp; Co analyst Jonathan Schildkraut said that AT&amp;T already provides the best selection of devices and with the iPad, it "is likely to maintain its position as a device leader."</p><p>But he said one drawback could be extra strain on AT&amp;T's network if the iPad becomes very popular. AT&amp;T has already admitted to network problems in certain markets, after loud complaints from iPhone users.</p><p>Because of the iPad's relatively affordable price, in comparison to laptop computers, Larsen said that it may hurt sales of netbooks, which wireless service providers have been championing as a way to add new customers.</p><p>"I think it hurts netbook sales. The carriers aren't selling netbooks to make money on netbooks. They're selling them to make money on wireless services," he said.</p><p>(Reporting by Sinead Carew; Editing by Tiffany Wu and Richard Chang)</p><img src="http://admatch-syndication.mochila.com/images/ad.gif?aid=67922071&bid=informcom" /></div><div id="copyright"><div>
Copyright 2010 <a href="http://www.reuters.com/finance">Reuters US Online Report Internet News</a></div></div>
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