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Apple to end AT&T's iPhone exclusive?

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Apple's hyper-hyped iPad may not be the only thing on Steve Jobs' agenda when he takes the stage this Wednesday at San Francisco's Yerba Buena center. The latest word on the street is that Apple may also announce the end of its US iPhone-exclusivity deal with AT&T.

Over the weekend, HotHardware reported that they have been "led to believe by an inside source" that Apple and AT&T are about to end their monogamous iPhone relationship.

If true, doing so might not only boost iPhone sales, but could also bring benefits to beleaguered AT&T.

On Apple's part, ending its one-carrier US scheme should attract potential buyers who are attracted to the iPhone but feel less warmly about AT&T. One analyst, in fact, predicted last October that ending AT&T exclusivity could as much as double iPhone sales in the US. Doing so certainly worked for Apple in France and the UK, which has the highest percentage of iPhone users in the known world.

The benefits to AT&T wouldn't be as direct, but dropping exclusivity could help Big Phone dig its way out of the PR nightmare that the success of the iPhone has brought it. Although the Cupertinian smartphone has been an overall moneymaker for AT&T, it has also caused them headaches, including a short-term financial hit as they subsidized the first wave of the iPhone 3GS.

More problematic for AT&T, however, has been the enormous strain that the iPhone has put on the company's overburdened network.

Customers have flooded AT&T with complaints about dropped calls and sluggish service. Problems have been particularly acute in cities chock-full of opinion leaders such as San Francisco and New York. In the Big Apple, in fact, one luckless iPhone user who complained that he was losing around 20 per cent of his calls was told by an Apple Store "genius" that he was lucky it wasn't 30 per cent.

One hint that AT&T might be ready to share some of the network pain with another carrier is the lack of buzz we've heard lately about Big Phone trying to extend its exclusivity agreement with Apple.

And then there's the fact that both the US Senate investigation and the Federal Communication Commission inquiry into exclusivity agreements have gone curiously cold. Perhaps there has been some backroom nodding and winking going on.

Yes, the iPhone has brought new and lucrative customers to AT&T, but in other ways the exclusivity deal has been nothing but trouble. Should HotHardware's insiders be correct - if we learn this Wednesday that Apple is opening up the iPhone in the US to, say, Verizon - there might be some signs of relief heard from the Big Phone boardroom. ®

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