Apple will reportedly introduce a version of the iPhone next year that can download from the Internet at a faster rate, AT&T Chief Executive Officer Randall Stephenson said. The device will operate on third-generation (3G) wireless networks, Stephenson said today at a meeting of the Churchill Club in Santa Clara, California. San Antonio-based AT&T is the exclusive carrier for the iPhone in the U.S.

The prospect of a new handset may make some shoppers put off buying an iPhone this year.

Iphone combines features of an iPod music player with a mobile handset, can download videos from Google's YouTube and find driving directions over a wireless connection.

AT&T, owner of the largest U.S. mobile-phone service, is using the iPhone to lure customers from its closest rival, Verizon Wireless, which announced a plan this week to open its network to any phone or software maker that meets technical specifications.