So says Pali Research, which in a research note this week argued that AT&T (T) should be very worried about the prospect of Verizon adding the iPhone to its handset lineup.

“As the iPhone exclusivity period rolls off between AT&T Wireless and Apple, a material number of AT&T customers will flock to Verizon’s superior network,” the firm states. “We estimate that nearly a third of AT&T’s post-paid customers are being retained by AT&T primarily because of the iPhone exclusivity.”

An unsettling thought for AT&T, whose five-year agreement to be the iPhone’s sole U.S. provider is reportedly set to expire in 2010. Especially since there are several compelling reasons for Apple to offer the iPhone to Verizon (VZ).

For one thing, the move would give Apple access to about 80 million new Verizon customers. For another, it would bring the iconic device to a carrier that might, you know, reasonably support all its features, a carrier whose LTE “4G” network isn’t four-to-five years off, a carrier whose name doesn’t elicit laughter and jeers at Apple’s Worldwide Developers Conference.

So why extend AT&T’s exclusive deal? If there’s a good reason, Pali doesn’t see it. The research house is betting on the iPhone coming to Verizon. And when it does…

“We expect AT&T Wireless net subscriber additions to fall to less than 1 million in 2010 from more than 4 million in 2008. With an LTE-based iPhone in 2011, we believe Verizon could take even more market share resulting in a contraction in AT&T’s subscriber base in that year.”

Palm (PALM) picked a hell of a day to launch the Pre. Two days before Apple’s World Wide Developers Conference. Two days before the unveiling of the iPhone 3G S, a new version of Apple’s (AAPL) iconic handset that runs twice as fast as its predecessor, shoots video with an improved three megapixel camera and boasts longer battery life and greater storage.

And worst of all, two days prior to the announcement of a new $99 price point for the iPhone 3G, a disruptive move that puts the device in reach of far more consumers and allows Apple to position last year’s iPhone as a competitor to this year’s Pre (and BlackBerry Storm too). And unlike this year’s Pre, last year’s iPhone comes with iTunes, a robust developer ecosystem, access to 50,000+ apps and soon iPhone OS 3.0.

And that may bode ill for a hard-to-come-by upstart handset that’ll set you back $199 after a $100 rebate.

Certainly, a $99 iPhone 3G is a very compelling proposition. Said CL King & Associates analyst Lawrence Harris, “Apple’s strategy appears to be designed to take advantage of the current limited availability of the Palm Pre. It is clear that Apple intends to maintain its leadership position in the smartphone market, given its decision to cut prices.” 

Clear too that Palm’s decision to roll out the Pre this past Saturday was folly and has not only left the company’s most important product release in years washed away in a deluge of Apple coverage, but allowed a powerful rival with a lot of market buzz to undercut the price of its bet-the-company handset within just days of its launch.

Sadly for Palm, it may be that the Pre’s best days are already behind it.

Check out our WWDC 2009 Full-Coverage special feature for more WWDC news.

Check out our WWDC 2009 Full-Coverage special feature for more WWDC news.

Forstall invites Gameloft to the stage to demo its new app for iPhone 3.0. Asphalt 5, a 3-D racing game. With media player access, users can access their iPod music via a “car stereo.” Developer describes Asphalt 5 as a console gaming experience. Doesn’t seem to quite live up to that description, but it’s still impressive.

Onstage now, Airstrip Technologies, a medical app developer. Airstrip Critical Care. Wow. Realtime medical data delivered remotely to iPhone. Measurable, viewable with zoom, searchable.

Next up: TomTom for iPhone. Looks great, but likely difficult to drive and use at the same time. Enter: TomTom Car Kit. Uses iPhone 3.0’s accessory framework to offer a hands-free experience. Also keeps your phone charged.

Check out our WWDC 2009 Full-Coverage special feature for more WWDC news.

Click any photo to launch a slideshow, then click arrows to page through the photos.

Check out our WWDC 2009 Full-Coverage special feature for more WWDC news.

Moving on now to Spotlight search and iTunes. Spotlight search across the entire device and all apps. Apple (AAPL) iTunes store on iPhone will soon offer videos for purchase. Audiobooks, too. Support for iTunes U has also been added.

Tethering: Works on Mac or PC, Over USB or Bluetooth. Seamless. No need for additional software. This is also carrier-dependent and…well, look at that. I don’t see an AT&T logo on the list of carriers supporting iPhone tethering. More groans from the audience as Forstall glosses right over this.

Safari for iPhone now boasts improved performance, HTTP audio and video streaming, Auto-fill and HTML 5 support. Also support for 30+ languages.

Check out our WWDC 2009 Full-Coverage special feature for more WWDC news.

Price? Leopard arrived at market at $129. Snow Leopard will be just $29 for Leopard users. Massive applause. Developer preview available today. The OS will ship in September.

Check out our WWDC 2009 Full-Coverage special feature for more WWDC news.

Also featured in Snow Leopard, live previews of documents and movies — you can actually page through a document or view a movie directly from the dock. Dock Expose seems like a very nice feature, allowing app-specific controls, zooming, and workflow across applications. Safari now offers full history search and full Spotlight text search of that history. Safari also monitors Top Sites and notifies a user when they’ve been updated.

And now on to Quicktime. It features a new UI with disappearing controls. Quicktime also features in-video timelines and the ability to perform basic edits and shares to YouTube, iTunes, etc.

Serlet talks about all the improvements in technology we’ve seen in computers of the past few years and how new software is necessary to properly take advantage of them. In order to do this, Snow Leopard will run all major applications in 64-bit mode. That will make it substantially faster. Also speeding things up, Grand Central Dispatch (GCD), a new system-wide technology that manages threads across multi-cores (if I’m understanding this correctly). GCD will increase performance and responsiveness.

Check out our WWDC 2009 Full-Coverage special feature for more WWDC news.

Slick. The trackpad now feature Chinese character support. Users simply draw the characters with their fingers.

Check out our WWDC 2009 Full-Coverage special feature for more WWDC news.

These are the best MacBooks we’ve ever made, says Schiller, noting the machine’s new unibody design. Schiller announces new version of the 15-inch MacBook Pro. Like its 17-inch counterpart, the 15-inch features Apple’s (AAPL) new lithium-polymer battery. “Nicest display we’ve ever put in a notebook,” says Schiller. The machine also features a built-in SD slot geared towards photographers. It’s also the fastest notebook Apple has ever made. 3.06 GHZ. Nice. So happy I bought my new machine two months ago. Onward. Up to 500 GB hard drive. Starts at $1699. Apple is updating the new 17-inch and 13-inch MacBook Pro as well. Similar configurations. Both devices feature that same SD slot. Built-in backlit keyboard. 13 is tricked out with a new Firewire 800 port. 13-inch MacBook Pro starts at $1199. All three machines ship today. “This is the most affordable line-up we’ve ever had,” says Schiller.

Check out our WWDC 2009 Full-Coverage special feature for more WWDC news.

What does Apple (AAPL) have in store for its army of third-party Mac OS X and iPhone developers at its Worldwide Developers Conference in San Francisco today?

An updated iPhone, or just Mac OS X Snow Leopard and iPhone 3.0?

Will the event’s keynote address feature a cameo appearance from iCEO Steve Jobs, who is preparing to return to Apple’s helm after a six-month medical leave? Or will iNotCEO Phil Schiller continue run the show as he did at MacWorld earlier this year?

• The hall in Moscone West is filling quickly to the sounds of Radiohead. As with most Apple events, the media presence appears huge today. In fact, developers and media seem to be here in almost equal numbers. Lots of excitement. The “welcome to WWDC 2009, please silence your cell phones” announcement is actually met with applause. … Some brassy attendee just wandered in brandishing a new Palm Pre.
• 10:01 and lights dim revealing a movie screen. Onscreen: John Hodgman as PC welcoming attendees to WWDC and encouraging developers to slow down iPhone App development. Increasingly frustrated Hodgeman finally fires off a raspberry. Replaced by Mac guy who welcomes everyone to WWDC. Phil Schiller takes the stage now. “Can’t you feel the love in this room?” 25 million active OS X users in the past two years, he says, talking up Leopard. Installed base has tripled in the past two years.
• These are the best MacBooks we’ve ever made, says Schiller, noting the machine’s new unibody design. Schiller announces a new version of the 15-inch MacBook Pro. Like its 17-inch counterpart, the 15-inch features Apple’s new lithium-polymer battery. “Nicest display we’ve ever put in a notebook,” says Schiller. The machine also features a built-in SD slot geared towards photographers. It’s also the fastest notebook Apple has ever made. 3.06 GHZ. Nice. So happy I bought my new machine two months ago. Onward. Up to 500 GB hard drive. Starts at $1699. Apple is updating the new 17-inch and 13-inch MacBook Pro as well. Similar configurations. Both devices feature that same SD slot. Built-in backlit keyboard. 13-inch is tricked out with a new Firewire 800 port. 13-inch MacBook Pro starts at $1199. All three machines ship today. “This is the most affordable line-up we’ve ever had,” says Schiller.
• Apple is also updating the MacBook air. Two new configurations starting at 1.8 GHZ. “Great hardware deserves great software,” says Schiller. And with that, he welcomes Bertrand Serlet to the stage to talk about OS X. Serlet immediately begins talking smack about Vista and Windows 7. “No end user should ever have to know about disc de-fragmentation,” he quips. Windows 7 is “fundamentally another version of Vista. “It’s the same old technology. … this is so very different from OS X …” Snow Leopard will feature a number of refinements. 90% of the OS has been tweaked, says Serlet. The Finder has been tweaked — not the UI, just the code beneath it. Expose has been built into the Dock. Installation is now 45 percent faster and, once you install it, you actually recover 6GB of disk space. Snow Leopard’s preview performance has also been enhanced.
• Slick. The trackpad now feature Chinese character support. Users simply draw the characters with their fingers.
• Moving on now to Safari 4 which is shipping today for Leopard, Tiger, AND Windows … Safari 4 offers unsurpassed speed for HTML and Javascript. It’s also Acid3 compliant. Safari 4 is 100 percent compliant as opposed to IE, which is 21 percent compliant. Safari 4 is also more crash-resistant and 40 percent faster than its predecessors.
• Also featured in Snow Leopard, live previews of documents and movies — you can actually page through a document or view a movie directly from the dock. Dock Expose seems a very nice feature, allowing app-specific controls, zooming, and workflow across applications. Safari now offers full history search and full Spotlight text search of that history. Safari also monitors Top Sites and notifies a user when they’ve been updated.
• And now on to Quicktime. It features a new UI with disappearing controls. Quicktime also features in-video timelines and the ability to perform basic edits and shares to YouTube, iTunes, etc.
• Serlet talks about all the improvements in technology we’ve seen in computers of the past few years and how new software is necessary to properly take advantage of them. In order to do this, Snow Leopard will run all major applications in 64-bit mode. That will make it substantially faster. Also speeding things up will be Grand Central Dispatch (GCD), a new system-wide technology that manages threads across multi-cores (if I’m understanding this correctly). GCD will increase performance and responsiveness.
• “We’ve decided to build Microsoft Exchange support into Snow Leopard,” says Serlet, to much applause. A quick demo of this new feature shows that set-up is extraordinarily easy. Corporate Exchange accounts are auto-discovered and searchable via Leopard technologies — regardless of whether a user has Microsoft Office installed on their local machine. iCal and Address Book offers integrated views of Exchange events and contacts and local events and contacts. The integration seems very slick and easy. It also supports Exchange’s location and availability features. Serlet points out that Microsoft charges for Exchange support, but Snow Leopard will provide it for free.
• Price? Leopard arrived at market at $129. Snow Leopard will be just $29 for Leopard users. Massive applause. Developer preview available today. The OS will ship in September.
• Scott Forstall takes the stage to talk about the iPhone. Developers have downloaded the SDK over a million times. “There are now over 50,000 apps in the App Store. “We have already sold more than 40 million iPhones and iPod Touches. On April 23rd we crossed the 1 billion apps sold line. That’s 1 billion apps in 9 months.”
• A video featuring a variety of developers gushing about the App Store and the iPhone SDK. Game developers. Medical app developers. “What Apple’s done is made it so we can focus on what we do best and they take care of the rest.” “It’s hard to express how cool the new streaming technology is.” “This is going to be the dominant device, the dominant platform in healthcare.” Video concludes with a variety of end users announcing their favorite app to the camera.
• So what’s next? iPhone OS 3.0, obviously. Its new features: cut, copy and paste, which works across apps and undo support via shake. Also, Landscape view and keyboard for all main applications — mail, messages, etc. MMS support has been added as well. But it’s carrier dependent. In the states, for example, AT&T won’t be supporting it until late summer (audience groans).
• Moving on now to Spotlight search and iTunes. Spotlight search across the entire device and all apps. iTunes store on iPhone will soon over videos for purchase. Audiobooks, too. Support for iTunes U has also been added.
• Tethering: Works on Mac or PC, Over USB or Bluetooth. Seemless. No need for additional software. This is also carrier dependent and … well, look at that. I don’t see an AT&T logo on the list of carriers supporting iPhone tethering. More groans from the audience as Forstall glosses right over this.
• Safari for iPhone now boasts improved performance, HTTP audio and video streaming, auto-fill and HTML 5 support. Also support for 30+ languages.
• Oh, this looks promising: “Find My iPhone.” Cut to video clip from 30 Rock episode in which Liz loses her iPhone. “Find My iPhone” is a feature of MobileMe, apparently. Lose your phone and log in to Mobile Me and the service will locate your phone for you. It will also allow you to force the device to play an audio alert so someone can locate it. And if you can’t? Remote wipe. Nice.
• Moving on now to in-app purchases, peer-to-peer support, accessories, and push notifications — things we heard about at Apple’s previous iPhone 3.0 event. Forstall offering the same details and sales pitch. In fact, this portion of the presentation looks like it’s been repurposed from that event.
• Forstall invites Gameloft to the stage to demo its new app for iPhone 3.0. Asphalt 5, a 3-D racing game. With media player access, users can access their iPod music via a “car stereo.” Developer describes Asphalt 5 as a console gaming experience. Doesn’t seem to quite live up to that description, but it’s still impressive.
• Onstage now, Airstrip Technologies, a medical app developer. “Airstrip Critical Care. Wow. Realtime medical data delivered remotely to iPhone. Measurable, viewable with zoom, searchable.
• Next up: TomTom for iPhone. Looks great, but likely difficult to drive and use at the same time. Enter: TomTom Car Kit. Uses iPhone 3.0’s accessory framework to offer a hands-free experience. Also keeps your phone charged.
• Moving on to ngmoco:), which I believe also demoed at Apple’s iPhone 3.0 event. The company is showing off its newest game — Star Defense. It makes use of 3.0’s new in-app purchase feature. You can buy expansion packs from within the game itself. Game is launching today, but its 3.0 features won’t work until 3.0 goes live.
• ngmoco:) is followed by Pasco, an education app. Using the app and an accessory to collect data on balloon pressure. Forestall joins demoer on stage in full “Mr. Science” get-up. “When you connect sensors to the iPhone, the whole world becomes a laboratory.”
• Next up: Zipcar and its new iPhone app. It tracks and locates Zipcar locations in a particular locale and notifies users of availability. App not only allows users to reserve cars, but helps them locate them as well. Tap a horn icon on your iPhone and the car’s horn sounds off. Tap an unlock icon and the car unlocks.
• A final demo from Line6 and Planet Waves features an guitar amplifier modeling app. Connectivity problems trouble the demo, but the software is impressive. Allows users to control effect, tuning and volume.
• Forstall returns to the stage for some final words about iPhone 3.0. Free for iPhone owners. $9.95 for iPod Touch owners. Available worldwide June 17. GM seed available to developers today. And with that he hands the keynote back over to Schiller. Schiller talks up the iPhone 3G, noting that two thirds of all mobile browsing is now done from iPhones and iPod Touches. He pulls up a graph of various app stores and the number of apps available at each. Apple’s App Store far exceeds them all.
• Schiller announces iPhone 3Gs. S is for speed. “This is a really fast iPhone.” Loads apps and Web sites very, very quickly. NYTimes.com loads more than 3x as fast. Schiller says its about 2x faster than the iPhone 3G. As expected, the device features a brand new 3 megapixel autofocus camera. Auto-focus. Auto-white balance. Auto-exposure. Tap-to-focus. Improved low-light sensitivity. Auto-macro. “The best thing about this camera is it also captures video.” 30 FPS VGA with audio. Auto-focus, etc. Quick demo of video shows that quality is impressive. Videos are stored alongside pix in the picture application. Edit and share videos with the tap of a finger. “And if my carrier supports it, I can even send these things via MMS,” Schiller quips in a poke at AT&T.
• Also new in the 3Gs: Voice Control. Features a brand new UI that displays the commands you can use. Some examples: “Call John.” “Call 414.555.5555.” “Play Songs by The Who.” “Play more songs like this” (using Genius feature). Also on-board in the new device, a built-in digital compass that’s capable of orienting to the direction a user is heading.
• Schiller rattling off new features. Improved security. Improved accessibility features. Improved battery life. 5 hours 3G talk time. 30 hours audio. “This is the fastest, most powerful iPhone yet,” says Schiller. Price? $199 for 16GB. $299 for 32GB. Both available in black and white. Apple will keep the current 8GB 3G on the market at $99. Lot’s of applause. That $99 3G is available TODAY. When will the 3Gs arrive at market? June 19 for initial launch and then a fast and massive roll-out to 80 countries.
• Lights dim to view a new iPhone ad. Big selling point is clearly video. Schiller returns to the stage for the warp-up. Will there be a “one more thing?” Doesn’t look like it. Now thanking all the Apple teams involved in these new products. And … that’s all she wrote.

Check out our WWDC 2009 Full-Coverage special feature for more WWDC news.

The Journal speculates that Jobs might make a surprise appearance during next week’s WWDC keynote and while the publication didn’t reach any hard conclusions on the issue, I suppose it is possible. When it first announced the WWDC keynote, Apple said it would be delivered by “a team of Apple executives, led by Philip Schiller, Apple’s senior vice president of Worldwide Product Marketing.” Could it happen that the team to which Apple refers includes Jobs himself after a grand “One more thing” entrance? I’ve no idea. Here’s hoping, though.

“If Apple was planning on releasing an updated Apple TV in Sept. (which we are expecting), the company could use [WWDC] to launch an SDK for the Apple TV and announce an App Store for the platform,” Munster writes. “The Apps could include digital video services to expand the content available on the Apple TV (i.e Hulu), but perhaps more importantly, developers could begin developing games for the AppleTV. We believe Apple would likely develop an SDK that enabled the iPhone or iPod touch to be a controller or input device for games on the iPhone. This would enable users to control game features (like driving a car) with the tilt of the iPhone or iPod touch using the built-in accelerometer, but would not enable Wii-like motion sensing, for advanced features like swinging a golf club or aiming a weapon. To be clear, we do not expect this to be announced at WWDC’09 due to its relative complexity; rather, it could be a 2010 event, as the AppleTV and iPhone platforms develop.”

An intriguing idea and one that, frankly, makes perfect sense. In one fell swoop it would add much needed heft to the Apple TV, vastly extend Apple’s reach in the gaming market and extend the iPhone ecosystem into the living room. Why wouldn’t Apple do this?