The Apple iPhone will a true iPod Phone enabling users to sync their iTunes library with their Apple cellphone, but can we expect wireless downloads to come at a premium?

Music will undoubtedly sync to the iPhone from iTunes, but Apple will also offer the option to download music OTA (over the air). The issue with OTA is the increased bandwidth needed to download large MP3 and video files. The iPhone is expected to be announced on both CDMA and GSM networks. In the US, an iPhone would work on any of the popular wireless networks including Cingular Wireless, Verizon, T-Mobile and Sprint. If Apple sells the phones direct (without a contract), it would be up to the new iPhone owner to activate their iPhone. If Apple expects to offer iTunes downloads over the air, new iPhone owners will need to add data plans to their cellphone packages. Although data package are still expensive (for example, Verizon Wireless offers unlimited data for $45), the carriers might still balk at the bandwith required by the iPhone for OTA downloads. Historically, carriers have marketed data packages to smartphone users as "unlimited", but there have been many cases where service contracts have been terminated by what the carrier calls misuse. It's often dial-up-networking and downloading large files through a wirless connection that has caused flags to go up at the providers. Unlimited has never truely been unlimited. A workaround could be an increased price point for music ($1.49 per song OTA versus $.99 for songs downloaded through iTunes) and a revenue share model with the carriers.

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