For years, developers have felt that the carriers have been guarding their networks from them. Coming from the open Internet, this initial distrust of developers was frustrating. There is nothing like having a great idea for a cool application and not being able to make your vision come true because the gatekeeper won’t let you through.

Apple was the only company in the world that could break the stalemate. Now AT&T is seeing its data revenues soaring 50% because their customers are able to use some of the cool applications that developers have dreamed of for years.

Better late than never. Pandora’s box is now open, but there should be profit enough for everyone.

Nullriver came out with a cute iPhone app that was banished from the iPhone App store as soon as Apple realized what it did. Their app lets a 3G iPhone user access the Internet through the 3G connection of the iPhone and share this connection through the iPhone WiFi connection to his laptop. This tethering app sold for $10.

This is not a new application. There are lots of hardware cards that allow users to do this already. The iPhone version is definitely new, but it should not have been considered against the rules. After all, the user is still paying for access to the Internet. It is just that the Internet connection is being used by another device that the user owns.

The latest report is that the app is back up and ready for more downloads. I just hope that AT&T has improved their 3G network enough to handle the increase in traffic.

For those of you not lucky enough to get an invitation to iPhoneDevCamp, all I can say is that you really need to sign up way early next time to be sure that you can get in. But you also need to watch the main iPhoneDevCamp site. It seems many did not show, and anyone and everyone was welcome.

iPhoneDevCamp2 was really a great event here in San Francisco. We were connected to the satellite camps via video link, and they looked like they were having fun too. In the case of the SF meeting, we had free food and beer. Nothing makes code come together more than good food and really great beer.

The best part of the event for me was being literally surrounded by iPhone dev experts. It is great to be able to get an answer for a question just by asking the person next to you vs. my usual method of researching on the web for hours.

The end result was not quite what I wanted, but I did make much headway. For example, I and another camp attendee (who shall remain nameless to protect him from any AT&T or Apple wrath) did a small experiment to see if I could figure out a way around buying an iPhone without the 2-year long AT&T contract.

A little background on the experiment. My phone is currently on the AT&T network. In fact, my SIM’s card is actually an old Cingular card, but it works fine in my phone. I had already tried to buy just the iPhone without the contract at the Apple store in Palo Alto because the Internet said that I could buy the iPhone without a contract for $500. The clerk informed me that the Internet was wrong (can you believe it?). The future plans call for letting people buy the iPhone without a contract, but it is not happening yet. No one really knows when (or if) it will.

So after spending much of the day browsing 3G iPhones on eBay, my fellow camp attendee decided to test if I would really be able to use my SIM card in an activated 3G iPhone. We converted a bit of marketing swag (a metal button that you can pin to your shirt) into an unofficial iPhone SIM extraction tool. Replacing his SIM card with mine, we found that the iPhone insisted on being activated by the iTunes store before it did anything. This was really disappointing since the iPhone will, at least, surf using WiFi without any SIM card whatsoever.

The result of the experiment is that I will have to get the iPhone with contract or buy a iTouch and wait for the iPhone to be made available without the contact.

Yesterday I attended the informal iPhone Developers Chat in Mountain View. The subject got around to the new iPhone price which is down from $500 to $200. Supposedly, AT&T is subsidizing the iPhone the same way that they do for other phones. Meanwhile AT&T and Apple have ended their original revenue share agreement.

The real question is how much is this subsidy. Whatever it is, AT&T has already counteracted it by raising the data rate to $30/month. Over the mandatory 2-year contract, the subsidy has been completely paid off. But to the cost of the iPhone, iSuppli put together a theoretical Bill of Materials (BOM) on the initial gen of the iPhone. It is a good starting point, but it must be high for today’s iPhone. For example, the iTouch, which differs from the iPhone in not having any phone, GSM or EDGE capability or, more important to this discussion, a subsidized price from AT&T is currently selling at the Apple store for $299. If the numbers on the iSuppli BOM are close to correct, then the iTouch should be about $30 cheaper to make than the iPhone. Assuming a margin of 50% for the iTouch, which is what iSuppli assumed with the initial iPhone, then the iTouch would cost about $150 to make. My guess is that his value is probably a little high, but assuming it is in the ballpark, then the iPhone costs about $180. Not a great price, but still a 10% margin even without any subsidy from AT&T.

If anyone out there has a better idea on the actual prices, let me know.