Report: AT&T looks to extend iPhone pact

The exclusive carrier of Apple's wildly popular smartphone is reportedly looking for another extension of their partnership.

Steven Musil
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Steven Musil is the night news editor at CNET News. He's been hooked on tech since learning BASIC in the late '70s. When not cleaning up after his daughter and son, Steven can be found pedaling around the San Francisco Bay Area. Before joining CNET in 2000, Steven spent 10 years at various Bay Area newspapers.
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AT&T is reportedly negotiating to extend its contract with Apple as the exclusive carrier for the iPhone. CNET

AT&T has found the golden goose in its iPhone partnership with Apple and it wants to keep it alive.

The original deal had AT&T as the exclusive carrier of the iPhone until 2008, at which time Apple would be allowed to start selling the wildly popular smartphone on other carriers. But the companies met last August and decided to extend that partnership through the end of this year.

Now, AT&T wants to extend that deal a bit further--say another two years. AT&T's chief executive is talking with Apple to keep that deal alive until 2011, according to a report Tuesday evening in The Wall Street Journal.

But that shouldn't be a big surprise to anyone. Apple has sold more than 17 million iPhones since its debut less than two years ago, and the carrier added 4.3 million iPhone subscribers in the second half of 2008--40 percent of whom were new to AT&T.

Certainly, Apple is making out pretty well with its AT&T partnership; the carrier reportedly offered Apple a $300 subsidy on each iPhone sold. But if AT&T was willing to go that far, Apple stands to clean up by negotiating contracts with other carriers.

At the same time, it seems that the Apple-AT&T arrangement is showing signs of strain on both sides. Last month, AT&T announced plans to sell iPhone 3Gs without a two-year contract for $599 and $699, a move that Apple quickly duplicated at its own stores.

Apple representatives did not immediately return calls for comment.

Will this have a fairy tale ending for AT&T? Stay tuned.