With the strong global success of the iPhone (News - Alert), it would stand to reason that its exclusive mobile provider would want to continue its tight relationship with Apple as long as possible. Ian Paul has reported in PC world that AT&T is seeking to protect its position until 2011.

AT&T is reportedly pressuring Apple (News - Alert) to extend their business arrangement, which is currently set to expire in 2010. Apple won’t discuss the talks and told the Wall Street Journal simply that it has a great relationship with AT&T (News - Alert).

Very few in the industry would question AT&T’s motives. After all, Apple reported the sale of 17 million devices since the introduction of the iPhone in 2007. Even better, the popularity of the smartphone has shown no signs of ceasing.

According to AT&T, in the second half of 2008, it signed 4.3 million iPhone subscribers and of these, 40 percent were new to AT&T. With the iPhone OS 3.0 set to launch this summer and new iPhone models driving the rumor mill, AT&T stands to enjoy another growth round. If only Sprint (News - Alert) Nextel had been able to secure this deal.

But not all is rosy in the deal for AT&T. It has been reported that the company pays Apple as much as $425 for every device sold just to keep the price of the iPhone within the customer’s reach. According to the Wall Street Journal, AT&T has paid out nearly $1.3 billion to discount the phone for new customers.

Even with this so-called Apple tax, AT&T is certainly reaping the benefits. But AT&T may be the only one to win if an extension is granted. Apple has already been able to generate significant demand for its product, but many have not signed on simply because they refuse to switch to AT&T. If they are not locked into a contract with AT&T, Apple could reach a much larger base of customers.

This reach could be even more important for Apple in moving forward. The hinted expectations of competition from new Android (News - Alert) releases out of Google and the already present threat of the Palm Pre and the first Android release could make limiting the iPhone a bad move for Apple.

In reality, Apple could extend its power in the wireless market if is unshackles the iPhone from AT&T. While some believe the company could go so far as to dictate terms to providers, the competition isn’t sitting idly by to let the iPhone continue to dominate. The future of wireless devices and especially smartphones will be exciting to watch.