Is apple or the phone service extending monopoly power

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Reference no: EM131403465

Apple sells the iPhone in the United States with the requirement that it be used only on the AT&T cell phone network. Indeed, Apple took a series of steps to prevent customers from "unlocking" the phone so that it could be used on other networks. The Orange network in France began selling the first iPhone for €399 ($588) with a two-year subscription. Unlike in the United States, one can get an unlocked iPhone in France from the vendor. Orange would unlock an iPhone for an additional €100 ($144) if the customer will choose an iPhone service plan, €150 if the customer stays with the carrier and has a non-iPhone plan (which doesn't allow one to use the iPhone's special features), and €250 if the customer does not have a plan with Orange (Stan Beer, "Orange iPhone Unlock Starts Demise of Exclusive Carrier Model," ITWire, November 28, 2007). Give plausible explanations why Apple chooses to have an exclusive deal with AT&T, why AT&T wants Apple to enforce exclusivity, and why Orange is being more flexible. Is Apple or the phone service "extending monopoly power?"

Reference no: EM131403465

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