The details of how the iPhone price dropped from $499 to $199 are beginning to emerge and according to confidential sources discussing the matter with USA Today, the bare bones agreement was if AT&T agreed to foot the bill for the $200 discount, Apple would let them stay the iPhone's exclusive carrier through 2010, an additional year.

Good news for Apple because they can sell cheap iPhones on someone else's dime, good news for AT&T because they keep their flagship product as an exclusive for another year, but bad news for consumers, as anyone not wanting to use an iPhone through AT&T has to wait at least three years in order to buy one.