Rumor Has It: AT&T Losing iPhone Exclusivity this Wednesday

According to a report over the weekend on, Apple (s aapl) may have more to announce at its special event this Wednesday than its mythical tablet.

We have been led to believe by an inside source that AT&T will lose their iPhone exclusivity on the same day, though it’s not yet clear what other carrier (or carriers) will be stepping in to also carry the phone.

It doesn’t come as any great surprise to hear about the end of AT&T’s (s att) exclusive partnership with Apple, but I will be surprised if El Jobso deliberately announces it during his keynote. After all, if he did announce it, at what may become the most-watched-and-reported-on  keynote in Apple’s history, the predictable whoops of delight from the attendees will be hugely embarrassing for AT&T. Will Jobs be so insensitive?

AppleInsider says AT&T’s contract with Apple expires in June this year. Certainly, AT&T has recently been shoring-up its offering of smartphones to include Android-based handsets, but that’s hardly unusual for a mobile operator striving to remain relevant in a crowded and hugely competitive market.

While Apple may be looking forward to ending the exclusivity deal, I don’t think the same is true of AT&T. They have attracted and retained millions of new subscribers with the iPhone since its launch in 2007. The press hasn’t been kind to it, and even its own CEO has criticized its bandwidth-chomping customers, but I’m sure AT&T doesn’t regret one single lucrative day of that almost-three-year partnership.

Brand Loyalty

Incidentally, this is pretty much win-win for Apple, who — I am sure — will see tremendous sales on other networks despite the relative age of the iPhone. For instance, here in the UK, O2 enjoyed high iPhone sales throughout its exclusive partnership period.

But as soon as O2’s exclusive partnership with Apple ended, Orange reported record-breaking opening day iPhone sales. And more recently, a third major carrier, Vodafone, also started selling the iPhone and reported even higher opening day sales.

If this demonstrates anything, it is that significant numbers of customers remain loyal to their cellular networks, choosing to “make do” with whatever handsets are available to them, all the while quietly coveting the wares of competing operators. Personally, I have no such loyalty. Most of the operators here in the UK offer pretty much the same awful services at pretty much the same inflated prices, with only minor differences in tariffs. The biggest differences lie, as always, in the range of handsets they have to offer.

When I bought my iPhone back in 2007 I just happened to already be an O2 customer, but I readily admit, had I been with another carrier, I would have made the move without hesitation. I’m surprised, then, to learn that an awful lot of people are not so ready to switch. Apparently brand loyalty extends to products and services beyond Apple. Who’d have thunk it?

A Harsh Light

AppleInsider suggests this brand loyalty probably had something to do with the relative sales success of iPhone alternatives such as Motorola’s Droid, which served as a “second best” choice for carrier-loyal customers who wanted an iPhone but weren’t prepared to leave their existing network operator.

…an announcement this week might effectively preclude a large group of consumers from upgrading to phones they might otherwise be interested in because they know the iPhone will be hitting the relatively stable Verizon network in just a few months.

Verizon’s (s vz) network may be “relatively stable” right now, but wasn’t AT&T’s considered stable before the arrival of the iPhone in 2007? I don’t know, of course, but — wasn’t AT&T always a bit rubbish? Didn’t it take the arrival of the iPhone to shine a harsh light on its patchy service?

Or was it the arrival of the iPhone that caused the degradation in service? HotHardware’s Shawn Oliver thinks it was the latter.

The iPhone itself doesn’t really handle the switch from 3G to EDGE very well, so calls that are in-progress tend to fail… It seems that AT&T is tired of taking the heat for this, and at this point, they may be smart to just let another carrier take some of those customers who are most inclined to complain.

Did he just imply iPhone customers are a bunch of moaning minnies?

So who’s right? Will the inevitable opening-up of the iPhone to other carriers in the U.S. destroy Android sales? Will Americans enjoy the iPhone price wars that (sadly) never happened over here? Or will everyone be too busy cooing over the Tablet to even care?

Or — worse — what’s the chance that Apple will have an AT&T-related announcement this Wednesday, but rather than confirming the end of the exclusivity deal, could Jobs announce a new, extended exclusivity partnership that includes the iPhone and the Tablet? What fresh horrors could such a partnership bring?

Related GigaOM Pro Research: Why Apple Should Choose Sprint Before Verizon Wireless