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Apple iPhone Risky for AT&T, Verizon

Telco uncertainty is on the rise as the new Apple iPhone debut approaches this summer.

CUPERTINO, Calif. (TheStreet) -- Apple's (AAPL) - Get Apple Inc. Report next move with the iPhone might mean crowning a new telco champ.

In keeping with its three-year tradition, Apple is expected to introduce a new version of the iPhone this summer. But the question of where iPhone 4.0 will land has phone industry analysts and investors up in the air.

AT&T's last-minute willingness to play ball with Apple by lowering data service prices to win the iPad

deal suggests negotiations are heated.

"This is a more fluid and dynamic situation than people might think," says Michael Cote of consultant firm Cote Collaborative. "It is also a lot less certain that some of the carriers actually think," says Cote, warning that iPhone plans that seem solid today could change.

Current Apple partner


(T) - Get AT&T Inc. Report

is in the final months of its exclusive iPhone sales contract and it has been expected that No. 1 player

Verizon (VZ) - Get Verizon Communications Inc. Report would be next up to sell the iPhone

to some of its 80 million customers.

But doubts about the iPhone going to Verizon have been growing. Verizon chief Ivan Seidenberg said in October that the ball was in Apple's court. And analysts have predicted that

Apple's iPhone has more options than just a Verizon or AT&T.

Apple enjoys a great deal of negotiation power as AT&T, Verizon,


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Deutsche Telekom's

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vie for a shot at the hot-selling iPhone. For telcos, the iPhone is a guaranteed blockbuster that will bring millions of new subscribers onboard.

For Apple, the release of the next iPhone represents a chance at another lucrative revenue sharing agreement and the possibility of taking the phone to a new market with another partner.

Long-time Verizon bear Craig Moffett of Bernstein Research turned less bearish Tuesday raising his rating to neutral on the stock, saying the iPhone risk "favors Verizon."

While far from a whole-hearted embrace of Verizon, the upgrade does point out that

AT&T has far more to lose if the iPhone goes to Verizon


"I wanted to be incredibly careful not to throw my hat into the ring by speculating who might and who might not get the iPhone," Moffett said of his understated praise for Verizon.

Clearly, the big loser in the iPhone race would be AT&T if the phone went to another carrier.

Apple fans wouldn't hesitate to switch service providers to get their hands on the latest version of their beloved phone. AT&T would see a crushing defection of some of its highest paying customers, should they lose the iPhone exclusivity edge.

Verizon has a strong new bond with


(GOOG) - Get Alphabet Inc. Class C Report




over Android phones, and smartphones from

Research In Motion





give Verizon one of its strongest lineups in years.

Verizon could be content to wait until a

4G wireless version of the iPhone is ready

, and that could be awhile.

--Reported by Scott Moritz in New York


>>4G: Years, Miles to Go

>>Verizon Propped Up by Wireless Gains

>>Apple Preps Fans for Major New iPad

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