For a handful of reasons, AT&T would like to make a dent - even if it's a tiny one - in the Android-dominated smartphone market. It wants to accomplish this feat even if it means having to use an Android alternative that's actually based on Android. That's where CyanogenMod comes in, a mobile OS that's skyrocketed in popularity over the years due to its "clean slate" and optimized design. Consumers like it because it's fast and clean; vendors like it because they have more control over their software packages.
If you're getting a hint that AT&T's ultimate goal here is to use a version of Android that will allow it to add as much bloat to a device as it pleases, you could be right. That's at least the latest rumor from The Information, which heard from "one person" involved with the talks.
ZTE's AXON Elite Smartphone
If this is true, then Cyanogenmod's use in this case would be more beneficial to AT&T than regular consumers, as it'd be able to better intertwine its offered services on the device, such as U-Verse and DirecTV. AT&T might actually find it important to make sure DirecTV is in consumer faces, since it has a $49 billion acquisition to make up for.
According to this leak, AT&T already has a hardware partner for this project: none other than China's ZTE. ZTE is a brand that hasn't been afraid to take chances, and it's so far tasted some incredible success in Asia. Its phones have also recently begun showing up on U.S. shores, although you might have to look hard to find one.
Ultimately, if AT&T goes with ZTE and Cyanogenmod, it'll have better control over the phone it sells you. From a consumer standpoint, that could possibly mean that the phone will be sold at a very competitive price, since one of AT&T's biggest goals here would be to pack in as much of its company's goodness into the device as possible.
While more control for AT&T and lower prices for consumers sounds like a win-win, we’d like to see the finished product to see just how much of a win this is for consumers.