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How long is Cingular/AT&T Wireless the exclusive iPhone carrier in the US?
On January 11, 2011, Apple introduced the iPhone 4 (CDMA) on Verizon, which broke AT&T's monopoly on the iPhone in the US. Nevertheless, an earlier answer, first published in 2007, and updated numerous times, can be quite useful for historical interest.
As noted in the press release promoting the agreement, Apple entered into a "multi-year partnership" for Cingular -- later rebranded again as "Wireless from AT&T" -- to exclusively provide cellular voice and data services for the iPhone.
Steve Jobs explained that this was because Cingular was the "best and most popular carrier in the US". No doubt some readers would debate whether or not the company really is the "best".
No official information regarding the precise length of the contract is available, but given that upon its introduction the iPhone required a two year contract with Cingular/AT&T Wireless for service it was a safe bet that the contract would be for at least two years from June 2006 in the United States. However, CNN reported that the contract was "through 2009" and USA Today reported that it was for "five years".
A January 10, 2007, article in the New York Times also said that if you want to use the iPhone on another carrier like T-Mobile, "you'll be waiting a long time, my friend" and that "the [multi-year] agreement also include[d] future models which would be introduced 'soon.'"
AT&T's exclusive deal to carry the iPhone in the U.S. expires next year, according to people familiar with the matter, and [AT&T CEO Randall] Stephenson is now in discussions with Apple Inc. to get an extension until 2011.
Additionally, MacRumors spotted an April 16, 2009 interview with Verizon CEO Ivan Seidenberg where he noted "it is more likely that Apple would be willing to work with the carrier under the fourth-generation, or 4G, network" and speculates that since Verizon plans to launch its 4G network in 2010 and AT&T Wireless' contract expires around the same time, this would be a convenient time for Apple to support multiple carriers.
Since that time, rumors of a CDMA-based iPhone to run on Verizon's network persisted, but AT&T's grip on the iPhone remained as tight as ever. More recent speculation ponders whether or not this exclusivity will end in 2011, but at this point one would be wise to remain skeptical given the track record of earlier speculation [this final speculation, thankfully, was correct].
For those interested in using an iPhone on a network other than AT&T Wireless in the US -- such as Dennis Sellers from the always excellent MacsimumNews -- one can only try to remain optimistic that AT&T's rein eventually will be coming to an end [it did in 2011]. In the meantime, however, one could consider purchasing an "unlocked" model from outside the US and using it on another carrier that supports GSM such as T-Mobile (Sprint and Verizon use CDMA and are not compatible with GSM phones).
Apple now offers the iPhone "unlocked and contract-free" in the US. An earlier answer, first published in 2007, and last updated on February 18, 2011, follows for historical interest. Thankfully, the simple answer is just "yes," finally.
Upon it's introduction on January 9, 2007, some were optimistic that the iPhone would be available "unlocked" through gray market channels in the United States at a premium, AT&T Wireless reportedly promised retaliation against those who unlock the iPhone.
In a thoroughly useless corporate non-response to this question, on June 26, 2007, Apple added (and subsequently removed):
AT&T is the exclusive wireless carrier for iPhone in the United States. If you currently use another wireless carrier, you can choose to transfer your number when you activate your AT&T account.
In the original iPhone Q&A published on February 5, 2007, EveryiPhone.com noted:
It is a safe assumption that creative hackers will unlock the iPhone eventually regardless of Cingular's [now AT&T's] plans, but neither Apple nor Cingular have any plans to offer the iPhone unlocked at this time.
As expected, as spotted by Gizmodo, on July 18, 2007, hardworking hackers at the iPhone Dev Wiki (now offline) managed to partially unlock the iPhone and released a program called IASign for others to do so. Other hackers subsequently managed to completely unlock the iPhone using hardware and software methods on August 24, 2007, and on September 11, 2007, the original iPhone Dev Wiki team released a free software unlock with a GUI version a few days later.
Apple was not pleased by these unlocking methods, warned that future updates would disable the software on September 24, 2007, and sure enough, released a software update that disabled unlocked phones by the end of the week. The iPhone Dev Wiki team (now offline) found a way around this, Apple broke this method as well, and no doubt the cycle will continue indefinitely. On December 8, 2007, the iPhone Dev Wiki even open sourced the unlocking software so that the community could continue to upgrade and improve it.
As Apple was required to offer the original iPhone unlocked in France, EveryiPhone.com was hopeful that it would become easier and easier for those who don't mind either paying a premium or getting their hands a bit dirty to use the iPhone with a carrier or contract different from the one that Apple and the mobile service providers intend, and indeed, the original iPhone spread around the world and was used on any number of carriers.
For the iPhone 3G, AT&T became much more draconian and started requiring those who bought an iPhone in the US to activate it before leaving a physical Apple or AT&T store (online purchase was no longer offered -- except for business users).
Some time "in the future", AT&T reportedly would allow one to purchase an iPhone 3G without a two-year contract for US$599 and US$699 for the 8 GB and 16 GB configurations, respectively, but these "probably still would be locked to the carrier". Sure enough, starting March 26, 2009 -- in an effort to reduce inventory in preparation for future models -- the company did just that and the phones did indeed remain locked to the carrier.
Nevertheless, the version 2.0 software pre-installed on the iPhone 3G was unlocked and jailbroken within hours of its release, so other GSM-supporting carriers (T-Mobile) were available for those in the US willing to break a contract and pay an early termination fee or buy a "never locked" iPhone 3G that had been re-imported from a market that allows the sale of such iPhones.
For the iPhone 3GS and iPhone OS 3.0, hardworking hackers went to work and quickly released tools called UltraSn0w and Purplesn0w that make it simple to unlock locked iPhone models running the latest version of the operating system. This doesn't eliminate contractual obligations, of course, but it means that unofficially unlocked iPhones will continue to be available through gray market channels.
For those interested in buying an unlocked iPhone, it is strongly recommended that one buy from an authorized reseller outside of the US, preferably in person, to avoid potential issues in the future related to unofficial unlocking methods. Theoretically, unofficial "hack" methods could compromise data security and Apple or a carrier could remotely disable the device entirely as well.
Americans should note that the world is full of beautiful countries that do not lock the iPhone to a carrier from Belgium to the Czech Republic, Hong Kong to New Zealand, along with many others, so consider picking up an iPhone while on vacation. Naturally, be sure to verify that the iPhone 4 is for sale in the country of interest and has officially unlocked models in stock prior to departure. Bon voyage! [As of June 14, 2011, international travel or workarounds no longer are needed to purchase an unlocked and contract-fee iPhone in the US].