San Francisco  - Apple's iPhone could see wider distribution in the US next year as the company has not yet agreed to a request from AT&T to extend the telecom giant's exclusive rights to the hit smartphone, the Wall Street Journal reported Wednesday.

The report said the exclusivity deal signed in 2007 is set to expire in 2010 and AT&T is asking Apple to extend it for two years.

The cult status of the phone has helped AT&T nab millions of new customers. In the second half of last year alone it signed up 4.3 million new iPhone subscribers - 40 per cent of whom switched to AT&T from other carriers. In total Apple has sold an estimated 17 million iPhones worldwide.

According to the Wall Street Journal, AT&T is heavily subsidizing the price of iPhones, shelling out 1.3 billion dollars to bring the price down to affordable levels. The company hopes to make up the cash with income from monthly data plans and by cross-selling other AT&T services such as landline phones, cable TV and internet access.

Industry analysts say that selling the iPhone to other carriers could greatly increase its market penetration in the US and that ties between executives at Apple and AT&T have become strained.