As soon as Verizon is able to make an agreement with Apple to produce the CDMA ready Iphone, we will begin to see AT&T's 43% share of the smartphone market decline. There is a large demand for the Iphone on all wireless networks. Remember, a monopolist maximizes producer surplus by selling less output and at a higher price than what would happen in a perfectly competitive market. Because of the monopoly that Apple has allowed AT&T to hold over the Iphone market, we have not been able to see perfect competition take place. I believe that by allowing other carriers to add the Iphone to their networks and sell the phone, we will see better rates for both the Iphone and the data plan associated with it.
The difficulty for Steve Jobs at Apple is to determine whether or not to renew an agreement with AT&T to be its exclusive carrier for the Iphone...a lucrative deal that has AT&T paying Apple a large some per Iphone, or to open up the Iphone to all carriers and benefit from more sales but at a lower margin.