AT&T Trying To Extend iPhone Exclusive Until 2011

AT&T’s exclusive deal to sell Apple’s iPhone in the U.S. expires next year, the WSJ confirms. But AT&T (T), which has gotten a lot of mileage out of selling Apple’s phone, is trying to extend the deal until 2011, the WSJ’s Amol Sharma reports.

Will Apple renew? AT&T’s flaky 3G network has been one of the iPhone’s worst features — at least in our experience in New York. And Apple (AAPL) could probably sell a lot more phones if they were also offered at Verizon Wireless, now the no. 1 provider in the U.S. by subscriber count.

One of Apple’s main reasons to stay with AT&T exclusively would be to avoid having to make a CDMA version of the iPhone that would work on Verizon’s 3G network (and few other networks around the world). Or a 3G phone that would work on T-Mobile’s unusual U.S. frequency.

But by next year, both AT&T and Verizon will be rolling out new, 4G networks; both based on the same technology called LTE. At that point, Apple could probably just make one version of the phone that could sell at either carrier.

Then it depends on how quickly the carriers are able to roll out LTE. If it looks like a viable option for a lot of consumers for 2011, Apple might be better off bailing on its AT&T exclusive. If it’s only going to be a niche service available in a handful of markets, Apple might as well keep the AT&T 3G exclusive until 2011 — and try to get the carrier to subsidise and promote iPhones more heavily in the meantime.

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