Smartphone buyers in the US will be able to buy a version of Apple’s new 3G iPhone for $599 without committing to a two-year service agreement, AT&T, the exclusive supplier of the iPhone in the US, said on Tuesday.

AT&T, which is locked in a fierce battle for customers with Verizon Wireless, the second largest US mobile operator, is counting on the new iPhone to give it the same subscriber boost the original iPhone did when it was launched last July.