Selling iPhones dents carriers' service margins (essentially, their profitability. OK then..

So why do carriers insist on selling the iPhone? Verizon, AT&T and Sprint all declined to comment directly on that question for this article, but the companies have said in the past that having the iPhone is a major selling point for their brands.

In an interview with CNNMoney in October, just after Sprint announced it would begin selling the iPhone, Sprint CEO Hesse said the No. 1 reason why customers had left Sprint prior to October was because it had no iPhone.

"More than two weeks ago, security researcher Trevor Eckhart posted a video about Carrier IQ, an obscure software installed on approximately 150 million smartphones. The 17-minute video sparked a firestorm not only because it alleged the software logged numerous details about users' activities, but also because it did so without their knowledge.

"But this week, two wireless carriers that use Carrier IQ's software said customers should not have been surprised that some of their activities were being tracked. In letters to Sen. Al Franken (D-Minn.), who asked them to explain how they used the software, AT&T and Sprint said Carrier IQ's capabilities were clearly outlined in their privacy policies."

Carrier IQ boss: “We don’t read SMS messages. We see them come in. We see the phone numbers attached to them. But we are not storing, analyzing or otherwise processing the contents of those messages.”

Apple says it will remove Carrier IQ in all other devices in the next software update.