It would appear the Apple – AT&T relationship is at a crossroads. Either they will continue their relationship with the iPhone, extending the carrier’s exclusive agreement with the phone creator, or they will end the agreement and Apple will offer the iPhone to other carriers. Clearly, AT&T wants the former, which would further extend their iPhone monopoly through probably two more generations (including a rumored model later this year). Apple might stand to benefit from offering the iPhone on, say, Verizon, thereby exposing its device to VWZ’s 80 million customers. So what’s AT&T going to do to keep Apple around? Perhaps they’ll acquiesce to Apple’s desire for lower pricing. 
As Olga Kharif of BusinessWeek relates, some people feel that the $70 minimum monthly charge for the iPhone is a bit steep — and that doesn’t even include messaging. Even with the cheapest voice and messaging plans (200 messages), the monthly charge still comes to $75. That precludes many consumers from adopting the iPhone. Just as it’s clear that AT&T wants to continue this relationship, it’s clear that Apple wants to spread the iPhone to more users. That means, in this instance, a lower price point. According to Kharif’s article, the cuts could begin with the data plan itself. Rather than the $30 charge consumers now face, it could be reduced to $20. This would be nice not only because of the savings, but because this was the price of the original iPhone data plan. The $30 plan originated with the iPhone 3G last summer. Not only that, but some analysts believe that AT&T will cut the price a full $100, so the iPhone 3G would start at $99 for the 8 GB model. This would open it up to consumers who otherwise wouldn’t consider the phone. Device cuts open up a whole new can of worms. Apparently, the cost to manufacture the phone has come down over the past year, with the most expensive aspect, the touch screen, taking a significant dip. This might allow Apple to introduce a low-cost iPhone this year — perhaps a prepaid model. The problem there is that AT&T doesn’t have a data plan for prepaid which would in any way accommodate even a moderate user. They did have a $20 prepaid unlimited data plan until last November, but discontinued it. That would have been perfect for prepaid iPhone users. While there has been plenty of talk about Verizon getting the iPhone, it appears that AT&T wants just as badly to keep the device under its control. If they implement these pricing changes they could attract a whole new type of consumer, thereby expanding their presence. It will help them expand while staying at the same place — possibly helping them even further when they do decide to offer the device to Verizon’s 80 million subscribers.
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