"If they want to get iPhone devices out there and sell as many as possible with other carriers, do they start sacrificing their profit margin?" Ryan asked. He said that kind of competition would certainly drive down the price.

Burden noted that if AT&T and T-Mobile were to compete in selling the iPhone over their respective GSM networks, there would be pressure on Apple to drop the price. But Burden said Apple is probably more interested in keeping the iPhone's US$199 price from eroding, if only to keep the smartphone category from slipping into a bargain price that could devalue the entire category.