The battle of the next-generation smartphones has begun as Apple (AAPL) officially unveiled the much-awaited iPhone 4 at the 2010 Worldwide Developers Conference (WWDC) on June 7. The revolutionary device will be exclusively carried by AT&T (T) in the U.S. and will be launched on June 24, 2010.
 
iPhone 4 represents Apple’s biggest handset update yet and boasts some mind-blowing features including a thin 9.3 mm body (the slimmest smartphone ever), dual cameras (back and front facing), HD video-streaming, the new Retina display, video chat (enabled by FaceTime software) and a powerful battery back up. The device comes with Apple’s A4chip (also used in iPad), which enable greater processing speeds vis-à-vis the existing versions of the iPhone.  
 
With regards to pricing, new customers can buy iPhone 4 at AT&T retail stores and online for $199 (for the 16GB model) and $299 (for the 32GB model), respectively, with a two-year service contract. Customers can preorder the device starting June 15, 2010.
 
For existing iPhone customers (whose contracts are due to expire in 2010), AT&T is offering an option for early upgrade to iPhone 4 at a discounted price, provided they meet the eligibility criteria. Otherwise, current customers have to shell out $399 for the 16 GB model $499 for the 32 GB model.     
 
AT&T recently replaced its $30 monthly unlimited wireless data plan with the newly launched tiered price plans for new customers. New iPhone 4 customers can either opt for the $15 DataPlus plan (for 200 MB of data) or $25 DataPro plan (for 2 GB of data). However, Ma Bell’s existing customers can continue with the unlimited data plan. 
 
AT&T currently exclusively markets iPhones (3G and 3GS) in the US. iPhone has been the tower of strength for the carrier, which continues to boost its wireless business. iPhone sales momentum remains strong as reflected by the healthy new activations of 2.7 million customers (more than a third represented by new customers) in the first-quarter 2010.
 
Although AT&T has marketing exclusivity for iPhone until 2012, the device is expected to be launched on archrival Verizon’s (VZ) network this year. However, Apple has not announced the availability of iPhone 4 on other carrier networks at the WWDC. This represents a disappointment for Big Red customers.
 
iPhone 4 will run on AT&T’s 3G network as the carrier is yet to launch its 4G network (expected in 2011). AT&T has doubled its 3G network speeds (by deploying the HSPA 7.2 technology) to address the increasing high-bandwidth demand for advanced data applications enabled by the state-of-the-art handhelds.
 
While iPhone 4 represents a major boost for AT&T, the device will face strong challenge from the latest Android smartphones, especially from EVO 4G (the first 4G phone), which Sprint Nextel (S) recently launched with great fanfare. Sprint reported that EVO 4G has broken the carrier’s previous smartphone sales record based on the volumes sold on the first day. With a bigger screen size and 4G network compatibility, EVO 4G has an edge over the iPhone 4.   
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