"Before the Steve Jobs hypnosis session, AT&T ruled. Handsets, their prices, branding, applications, contractual terms, content salesâ€¦AT&T decided everything and made pennies on each bit that flowed through its network. Then the Great Mesmerizer swept the table. Apple provided the hardware, the operating system, and â€œeverything elseâ€: applications, music, ringtones, movies, booksâ€¦ The iTunes cash register rang and AT&T didnâ€™t make a red cent on content.
"In the eyes of other carriers, AT&T sold its birthright. But they didnâ€™t sell cheap. The industry-wide ARPU (Average Revenue Per User per month) is a little more than $50. AT&Tâ€™s iPhone ARPU hovers above $100. Subtract $25 kicked back to Apple, and AT&T still wins. More important, AT&Tâ€™s iPhone exclusivity in the US â€œstoleâ€ millions of subscribers from rivals Verizon, Sprint, and T-Mobileâ€"more than 1 million per quarter since the iPhone came out in June, 2007.
"(Legend has it that Jobs approached Verizon before AT&T, but Appleâ€™s demands were deemed â€œobsceneâ€. If the story is true, Verizonâ€™s disgust lost them 10 million subscribers and billions in revenueâ€"much more than it would have made in content sales putatively under its control. Another theory, unprovable but preferable, is that Apple went for the worldwide â€œGSMâ€™â€™ standard, hence AT&T.)"