With Chirp, Twitter’s developer conference taking place next week, the popular social networking site has made a huge announcement that will shake up the category of Twitter clients on the iPhone. According to a blog entry on Twitter’s blog site, Twitter has acquired Atebit’s hugely popular iPhone and Mac Twitter client Tweetie. The blog entry from CEO Evan Williams states:

We’re thrilled to announce that we’ve entered into an agreement with Atebits (aka Loren Brichter) to acquire Tweetie, a leading iPhone Twitter client. Tweetie will be renamed Twitter for iPhone and made free (currently $2.99) in the iTunes AppStore in the coming weeks. Loren will become a key member of our mobile team that is already having huge impact with device makers and service providers around the world. Loren’s work won the 2009 Apple Design Award and we will eventually launch Twitter for iPad with his help.

This is tremendous news as Tweetie is considered one of the best experiences for Twitter on the iPhone. It will be interesting to see how this news affects those developers  attending the conference next week and the future of third party Twitter clients in general.