Rumor: AT & T to carry Android OS phones

Wed, 05/27/2009 - 9:05am
Maisie Ramsay, Wireless Week

Amid rumors that AT&T’s exclusive contract with the Apple iPhone may be at an end, reports have emerged that the carrier is prepping at least two Google Android-based phones for release later this year.

According to documents leaked to the blog Engadget, AT&T Mobility will launch the HTC Lancaster on Aug. 3 and will be the device’s exclusive carrier for a full six months before it becomes available to other vendors. However, AT&T’s request for a unique user interface could delay the launch of the device.

The device is expected to feature a customized, AT&T-branded user interface and a full qwerty keyboard. According to Engadget, it also will have a 3-megapixel, fixed-focus camera, triband EDGE and 850/1900 MHz HSPA, assisted GPS, Bluetooth 2.0, a specialized skin and unique social messaging user interface.

AT&T is also planning to launch a 3G Android-based phone made by Motorola called the Heron. The phone will have a 2.8-inch touchscreen, 3-megapixel camera with flash and assisted GPS. The Heron should hit the market on Nov. 2, although Engadget warned that “we suspect these slides are a bit dated and that may ultimately be wholly off target.”

Though AT&T declined to comment, the rumors come on top of Wall Street Journal reports that AT&T’s exclusive iPhone retailing contract with Apple could end next year, making the company’s likely move into Android-based phones strategically significant.

“The iPhone has now proven to be a big success, and AT&T would be crazy not to want to keep the exclusivity as long as they can,” said analyst Jeff Kagan in a prior interview with Wireless Week.

In last year’s third quarter, the iPhone single-handedly spurred the largest net gain in postpaid wireless subscribers in the company’s history. iPhone customers are high-value subscribers with a significantly higher ARPU and lower churn rates than the average postpaid customer.

The Android-based phones could attract high-value customers similar to those who bought the iPhone. Carrying Android-based phones could also help AT&T bolster its competitive position against rival carrier Verizon Wireless, the largest carrier in the U.S. Verizon Wireless initially passed on the iPhone deal, but could have access to the device if AT&T’s contract with Apple is not renewed.

At the CTIA show in April, Ralph de la Vega, CEO of AT&T Mobility and Consumer Markets, more or less dodged a reporter’s question about AT&T’s plans for Android, saying the company wanted to make sure it does all it wants it do to before committing.

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•  Rumor: AT&T to carry Android OS phones
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