In exchange for maintaining his accustomed control over the new product's design, Jobs agreed to lock the iPhone exclusively to AT&T's network for five years.  This arrangement has forced Apple to do AT&T's dirty work, using unpopular and draconian measures to prevent customers from taking their iPhones to competing carriers.  As Washington Post tech guru Rob Pegoraro notes, "this has upset customers, and it's also against the company's own long-term interest."

No company wants to be forced against its will to offend its own customers.  A recent survey shows that 32 percent of wireless subscribers would be interested in purchasing an iPhone.  According to CTIA's wireless industry survey, this amounts to over 75 million potential customers.  Due to their exclusive agreement with AT&T, however, Apple is prohibited from reaching over 55 million of these customers.  Even a very favorable revenue-sharing agreement with AT&T cannot mitigate this loss of potential profit.

Steve Jobs recognizes that it is in Apple's best interest is to sell an iPhone to every wireless customer who wants one, regardless of network.  Apple moved one step closer to this goal when Verizon announced last week that customers will soon be permitted to use any device or application on Verizon's network. 

If Apple simply declared that they will sell iPhones to any customer on any network, they would not only reach all of Verizon's customers, but competing carriers would likely bow to consumer pressure and open their networks as well.  Rather than being a villain who blocks phones and restricts choice, Jobs could become a hero who forever changes the way the wireless industry operates.  If only he could end his exclusive five-year agreement with AT&T...

This is where the scale of Randall Stephenson's mistake becomes apparent.  Steve Jobs doesn't just request secrecy from his employees and business partners; he enforces it with strict nondisclosure agreements.  Breaking these agreements comes with severe consequences.  Apple has a fearsome reputation for suing not only the violator, but also the bloggers and journalists who print confidential trade secrets.  For Steve Jobs, no secrets are more closely guarded (and protected) than product release dates.

This information is especially valuable because Jobs depends on building anticipation to generate millions of dollars in free advertising.  When asked last week about the next iPhone, Stephenson responded, "has Jobs announced that?  I don't think he's announced that, but you'll have it next year."  Not only did Stephenson reveal confidential information about a product release, but he acknowledged that he knew it was still confidential.

It seems that Christmas came early for Apple this year.  Given Steve Jobs' obsession with secrecy, there is little doubt that Stephenson violated an existing nondisclosure clause buried in the exclusivity agreement.  In all likelihood, Apple can now exercise this clause and dissolve the contract.  Apple has nothing to lose by walking away from AT&T.  With Verizon leading the way towards open networks, Apple may finally be able to put an iPhone in everyone's stocking.