iPhone in Apple's hands

Until the iPhone, carriers had primary control over the design, pricing, and distribution of the phones they offered to consumers. The iPhone changes all that. In spite of the deal with Cingular, and its parent AT&T Inc. (NYSE:T), Apple Inc. (NASDAQ:AAPL) appears at the helm and is calling the shots on distribution and pricing.

In return for ceding these decisions to Apple, AT&T "will win new subscribers attracted to the iPod experience and boost data service revenues and average revenue per customer because the phone makes SMS, email and Web browsing easy," Glen Lurie, Cingular Wireless national distribution president, explained.

Seems like a sure thing as I am certain Cingular will win many new converts come June.

Lurie also added that since "the phone is an iPod. Apple will set the price." Because "it's an iPod," he continued, only the Apple name will appear on the iPhone's case, not the AT&T brand name. The AT&T brand name, however, will appear on the device's screen when the phone is turned and possibly when the phone's radio is playing," he added.

Despite the $499 for the 4GB iPhone, Lurie is not overly concerned with consumer reluctance to dig deep into their pockets. I wouldn't be either if I were endorsing this particular Apple product.