Speculation has been rampant over a Verizon Wireless iPhone, however a simpler path for Apple to expand its iPhone market would be to offer the device to T-Mobile. Doug Reid, an analyst at Thomas Weisel, sees this move as a logical step.
Apple already offers the iPhone through Germany's T-Mobile unit (T-Mobile is owned by Deutsche Telekom). The carrier has compatible wireless technology to AT&T and wouldn't require any hardware changes to the iPhone, unlike any move to Verizon Wireless.
Furthermore, although Verizon is double the size of T-Mobile at over 70 million subscribers, lately Verizon has been embracing Google's Android and aggressively competing with AT&T in its marketing department by directly targeting the iPhone.
Reports have indicated that Apple's exclusive deal with AT&T expires as early as summer 2010. A move to T-Mobile would be similar to Apple's strategy in other countries after exclusivity deals in those markets ended.
It's widely believed that Verizon rejected an offer of exclusivity from Apple when the iPhone first launched in 2007. Issues over software control and revenue sharing with Verizon are cited as factors that led to Apple's deal with second-largest US carrier AT&T.
Many iPhone users with jailbroken and unlocked devices already subscribe to service with T-Mobile.