If you allow two carriers to sell your phone, they are eventually going to compete on price, driving the price (and profit) down. If Apple allowed both T-Mobil

If you allow two carriers to sell your phone, they are eventually going to compete on price, driving the price (and profit) down. If Apple allowed both T-Mobile and AT&T to sell the iPhone for $199, people would make the comparison and see that AT&T has the better network (as scary as that sounds). T-Mobile would have to compete, and since it would cost billions to improve their network, their only real option is to sell the iPhone cheaper than the competition. so they offer the iPhone for $149. AT&T responds by lowering their price to $99 to compete with T-Mobile, and so on, and so on. By restricting the iPhone to one carrier, Apple only has to compete with itself (when it releases a new version).