Apple Does Little to Dispel iPhone, ATandT Rumors

Apple did little to snuff the rumors that AT&T's exclusive relationship with its iPhone is about to come to an end. When asked about the benefits of a single-carrier relationship, Apple execs answered that AT&T had a strong plan for dealing with its issues.

During Apple's fiscal 2010 first-quarter conference call with investors on Jan. 25, Apple executives announced record-breaking sales, revenue and income, but did little to dispel the rumors that on Jan. 27, AT&T's exclusive hold on the Apple iPhone will come to an end.

The first question on the call came from Gene Munster, an analyst with Piper Jaffray. By his company's estimates, Munster said, 40 percent of Apple's iPhones ran on the AT&T network, whose bad press, of late, has surely also impacted the Apple brand. "Can you remind us what the benefits and virtues of sticking with a single carrier in the U.S. are?" Munster asked.

If once upon a time there were benefits to sticking with a single carrier, Apple seems to have forgotten them, as AT&T's contract nears its end - whether this week or this summer - and Apple prepares to offer the iPhone to an additional carrier.

"AT&T is a great partner. We've been working with them since well before we announced the first iPhone, to get it out. I think it's important to remember that they have more mobile broadband usage than any other carrier in the world," Apple's Chief Operating Officer, Tim Cook, responded, not quite answering the question.

Addressing the bad press, as Munster referred to it, Cook continued:

"In the vast majority of locations, we think that iPhone customers are having a great experience, from the research that we've done. As you know, AT&T has acknowledged that they're having some issues in a few cities, and they have very detailed plans to address these. We have personally reviewed these plans, and we have very high confidence that they'll make significant progress toward fixing them."

It's rumored that AT&T's exclusive contract will come to an end on the same day that Apple will reportedly introduce its new slate device - which was a topic that, during the conference call, Cook and Apple Chief Financial Officer Peter Oppenheimer were even more tight-lipped about.

When another analyst asked whether the financial guidance Apple provided included "any unannounced products," neither man acknowledged that a new product was imminent.

"I think you're maybe alluding to our event on Wednesday, and I don't have anything to share with you today, so please stay tuned," Oppenheimer answered, putting an end to the topic.

In a press release on the earnings call, however, Apple CEO Steve Jobs is quoted as saying, "The new products we are planning to release this year are very strong, starting this week with a major new product that we're really excited about."

Munster was among the first to report that Apple was planning a slate product, writing in a May research note to investors, "We expect Apple to fill the gap between the iPod Touch and the MacBook with a new tablet device (not a netbook) priced at about $500-$700."

Those curious as to whether Munster and the rumors are correct will have to take Oppenheimer's advice and stay tuned.