Does Apple have an “Out” Clause for its partnership for AT&T?

The main problem with the iPhone 3G launch appears to have been AT&T. AT&T didn’t ship enough phones to its stores, and wasn’t able to handle activations fast enough. If you look at the number one reason stopping would-be iPhone users from buying one, I’m pretty sure it’s AT&T.

Our last experience with AT&T was having our account padded with a bunch of services we didn’t ask for (in fact explicitly refused) but not noticing it because during the first two months on a contract it’s impossible to figure out your bill (it has all kinds of whacky one-off items) and then not being able to turn off the features we didn’t want and weren’t using when we discovered them for over six months, and then not being able to be refunded for them afterwards. When we switched to Verizon (whom we hate for different reasons) AT&T reps called us to ask if there was anything they could do to change our minds. Well, you could go back in a time machine and not rip us off.

Generally, a contractual agreement between business partners, such as Apple’s exclusivity deal with AT&T, has “out” clauses for such things as non-performance. Recently, for example, Paramount was sued by licensees of the Star Trek brand for producing lousy Star Trek series and destroying the value of the brand. If a famous athlete is discredited for taking steroids or sexually assaulting someone he/she will lose his/her endorsement contracts. Perhaps the most germane example I can think of is Apple’s iTunes licensing agreement with the big music studios which gives them an “out” if Apple fails to address any cracking of iTunes DRM within 30 days.

Just how badly can AT&T screw things up and not give Apple an early “out” from their exclusivity deal? It almost makes me wonder if Apple’s incredible efforts to put iPhones in their stores were an attempt to force AT&T to fail some benchmark. (It would also explain AT&T’s deliberate understocking.)