AT&T Exclusive Is Costing Apple

The newly released data on Monday from NPD Group shows that Android powered phones, responsible for 28 percent of all handsets sold, outsold iPhone for Q1 in the U.S. Android was the No. 2 selling smartphone operating system, behind Research In Motion’s 36 percent.

Those in the tech industry is well aware that iPhone’s platform, user experience and apps quality is still far ahead of the game compared with Androids. But to the general public, the NPD report signaled the arrival of Android phones as an viable alternative to iPhone. This probably sends an alarm to Apple as the PR machine in Cupertino responded by saying the NPD claim is from “limited” data and does not tell the whole story.

In fact the Android platform is fast catching up to iPhone and there is no shortage of Android apps now as there are over 50,000 of them. More importantly, there are more hardware choices with Android, many are cheaper than iPhone. You have Google Nexus One, Motorola Droid, HTC Incredible and handsets from Samsung and LG, etc. And then you have more carrier choices with Android.

We believe the lack of carrier choice is what costing Apple the numbers here. Three out of four major U.S. wireless carriers don’t have the iPhone. It is arrogance indeed if Apple thought everyone would change phone carrier for the sake of owning an iPhone. Two years ago this might work, but not so with competitors closing in.

So will we see iPhone in other carrier other than AT&T? There has been on-going rumors since iPhone’s launch that it is happening. The speculation no doubt will escalate with the impending launch of iPhone 4th generation. Engadget recently [reported]( that AT&T has an exclusive deal with Apple for 5 long year from 2007 till 2012. Whether the agreement is still valid is anyone’s guess. [Crunchgear rumored]( that Landor Associates, which handles Verizon’s branding, is working on an iPhone advertising campaign.

It is a win-win for Apple and consumers if more carriers have iPhone. We all will never know what’s the win for Apple for being AT&T exclusive, but this is costing Apple indeed, at least in public perception that Android is now doing better than iPhone.