contract

Next year could be it for AT&T. Customers are losing patience with spotty service. Lawyers are filing class action lawsuits about the lack of MMS. Now Piper Jaffray senior research analyst Gene Munster has forecast the end of Apple's iPhone exclusivity deal with AT&T.

According to Munster, the economics of the situation don't make sense for Apple, as evidenced with the success they've had in France moving to a multiple carrier business model. Market share for the iPhone in France has increased to 40 percent since they ended an exclusive deal with Orange.

In a move to preserve the exclusive relationship with Apple and increase iPhone sales, AT&T may be considering changes to iPhone data plan pricing with the introduction of the next generation device. A typical two-year contract would see a price decrease of $10 per month, bringing the cost back to what original iPhone users signed up for in 2007.

Market research has shown that the high monthly cost associated with iPhone contracts may steer some users away from purchasing the device. The minimum cost over the required two-year contract amounts to over $1700 not including text messaging, taxes and fees.

AT&T has confirmed it will start selling un-subsidized iPhone 3G hardware without a contract, only months before the release of iPhone 3.0. Both the 8GB and 16GB models will be available at full price, $599 and $699 respectively.

Pre-paid service will not be an option, as activation of no-contract phones will require an iPhone data plan, costing $30 monthly. Unfortunately for those interested in using the device with a different carrier, even the full price iPhone 3G hardware will still be locked to AT&T.