An AT&T partner earlier this week speculated the operator may be finding itself in competition with the iPhone for customer loyalties.

"I think there must be a struggle inside AT&T to say, 'We've got a lot of new subscribers because of the iPhone, but they are loyal to the iPhone, not AT&T. So is this good? Isn't this what we've been calling a dumb pipe?'" said Satoshi Nakajima, president of Big Canvas, a company that builds iPhone applications. Nakajima also founded UIEvolution, which works with AT&T.

Smith said AT&T sees four different ways of being involved with mobile offerings:

- AT&T applications on AT&T devices;

- third-party devices, such as the iPhone, that run some AT&T applications;