AT&T to Extend iPhone Exclusivity Contract in U.S.

USA Today is reporting that AT&T has reached an agreement with Apple to extend AT&T’s exclusive rights to carry the iPhone in the United States. AT&T will remain the exclusive retailer of the iPhone through 2010. AT&T subsidizes the price of the iPhone to the tune of about $300, which keeps the handset’s retail price at $199. AT&T hopes to make up for the subsidy by being the exclusive service provider for the popular handset.

This move may anger some, who want to be able to use the iPhone with any carrier they choose. But in the United States the newest version if the iPhone will only work on the AT&T network or the T-Mobile network. The wireless technology in the U.S. is so different that Apple would have to develop an entirely new phone in order to have a device that would function on a Verizon or Sprint network.

Even if iPhone owners are able to unlock the device, it isn’t fully compatible with T-Mobile’s 3G network. To get the full iPhone 3G experience Americans are going to have to stick with an AT&T service plan, until some clever people come up with a way around service compatibility.