MacRumors.com

USA Today reports in the intense competition in the mobile phone industry. With 78% of U.S. household with a mobile phone, customer growth now relies on customer acquisition from other providers.

In this ongoing battle, the iPhone is a key player:

"I'm glad we have (the iPhone) in our bag," he says. "Others will try to match it, but for a period of time, they're going to be playing catch-up."

USA Today confirms that the iPhone is contractually bound to AT&T as an exclusive for a period of five years. Previous reports had varied, with one report claiming the deal as lasting through 2009 instead. Apple is also said to be prohibited from creating a CDMA version of the iPhone during this time.

Verizon had the first shot at the iPhone prior to the Cingular deal but was unwilling to concede to Apple's demands. Verizon has yet to admit that passing on the iPhone was a mistake:

Denny Strigl, Verizon's chief operating officer, decided to pass on the iPhone deal and says he has no regrets: "Time will tell" if he made the right call, he says.

But with the obvious interest in the iPhone, they are preparing "an answer" to the iPhone.

Given Apple's cultlike following, however, Verizon isn't taking any chances. Strigl says Verizon is already working with a manufacturer — he declines to say which one — on an answer to the iPhone. "We do have a very good response in the mill," he says. "You'll see that from us in the late summer."