• by Emily Burg , May 31, 2007

Oh, the iPhone. Have you heard enough about it yet? All this hype for a device that has only been publicly displayed once-by baby daddy Steve Jobs at Macworld at the beginning of the year-and advertised once-during the Academy Awards telecast at the end of February.

Just two tiny glimpses of what is yet to come mid-June, and we can't get enough of what is being heralded as the technological device that will draw a line in the sand, making or breaking the fortunes of the players in the wireless industry.

Or so it would appear. It seems as though AT&T (ex-Cingular, remember, they really want you to remember that. They've spent millions of dollars trying to get you to remember to forget that) sits in the catbird seat with its exclusive contract for the iPhone in the U.S.

But it still struggles with myriad challenges around the aforementioned rebranding strategy it has undertaken and the less than stellar response it's received for its new "Quad Play" strategy of delivering bundled services across wireless, landline, high-speed Internet and TV.

More specifically, AT&T is retooling its much-hyped Unity calling plan, designed to market its broad range of services, in advance of the iPhone launch. Rumor has it that AT&T hopes it'll be able to sell Unity to a larger audience when iPhone launches, capitalizing on the interest in the uber-gadget that may not otherwise have been present in its standard slate of services.

In response, AT&T spokesman Brad Mays told me, "As we regularly do with most of our services, we are looking at ways to enhance the Unity service to deliver even greater value and further broaden its appeal among consumers."

"Thousands of customers today are enjoying the benefits of our 100 million-plus calling community, and we continue to sell this service to consumers looking for innovative wireline-wireless calling solutions."

He did not specifically comment on the iPhone angle, or on other published reports that described Unity as "failed."

There are lots of things that wireless company spokespeople won't comment on in these last few weeks before the iPhone hits stores, like what Verizon Wireless has in the works to compete with AT&T's iPhone deal.

Verizon Wireless has made a big deal out of the addition of the newest BlackBerry device to its suite of smartphones, and it is entitled to some bragging rights given that the phone hit its stores last week, well ahead of Sprint Nextel, which won't have the phone in stock until July.

How it will explicitly compete for the smartphone and music-loving customer the iPhone is designed for is the big question. It hasn't had big success with the LG Chocolate phone, its answer to Cingular's MOTOROKR, the first iteration of iTunes-enabled phone. So again we turn to the rumor mill. Here is where things get interesting.

Prada and LG introduced a super deluxe, high-end phone in January, right after the iPhone was unveiled, that was striking similar-both have a touch-screen design-and is already in use in Europe and Asia. Rumor has it that Verizon, who already is in bed with LG, has struck a deal to become the U.S. distributor of the phone, though Verizon likely will sell it at a much lower price point than its current $700-plus.

In a classic case of less is more, Verizon Wireless spokeswoman Brenda Raney responded to my e-mail inquiry on the subject with the following:

"We cannot comment on anything associated with the [Prada LG] phone you referenced. There has been nothing issued by Verizon Wireless confirming that we are carrying the Prada--in fact, the device doesn't currently work on our network."

Well, of course the device doesn't currently work on the network. Then again, Apple managed to overcome that dispute with Cisco over the iPhone name in a snap.

And predicted sales of 10 million iPhones, not to mention the unquantifiable value in media hype and impressions that AT&T has earned by virtue of its sweetheart deal, sounds like pretty compelling motivation to play catch-up for a brand that's built on saying it's America's largest and most reliable wireless and data network.