AT&T to offer limited iPhone 3G sales without contract

[AppleInsider]

AT&T will begin offering "no commitment" pricing on the iPhone 3G beginning on March 26, without any service contract requirement, according to a report leaking an internal company training memo.

The report, posted by Boy Genius, says that AT&T will only offer the iPhone 3G at its "no commit" price of $599 for the 8GB version or $699 for the 16GB model to existing customers, and limit them to one unit each at that price.

However, the document also notes that AT&T has no way of tracking if the user has already bought a unit at the no commit price within the company's billing system, although AT&T retail stores "can see the transaction through OPUS [AT&T's point of sale system] if the device was purchased through AT&T COR [a company-operated retail store]."

The document says "AT&T is restricting the No-Commit price to existing customers who wish to add a line, purchase as a gift, or perform and [sic] upgrade and are not eligible for the Qualified or Early upgrade price."

"Qualified pricing" refers to the standard $199/$299 price of the iPhone 3G when obtained with a two year contract commitment. For AT&T users who recently received a contract subsidized phone of any kind, AT&T charges an "Early Upgrade price" that is $200 more than the iPhone 3G's qualified price: $399/$499. It also requires a two year contract extension.

The no-committment iPhone models from AT&T incur a device activation fee when used with AT&T's service, and also require a data plan, although device activation is not required at the point of sale.

The new "no-commit" sales program appears to be an effort to push out remaining iPhone 3G inventory prior to the launch of the next iPhone, due sometime this summer. Last year, Apple similarly allowed the existing inventory of iPhones to dry up to the point where almost no iPhones were left for several weeks prior to the launch of iPhone 3G.

Other iPhone 3G partners are similarly discounting iPhone sales to move inventory, which has resulted in various dire rumors about the iPhone's prospects, not unlike last year when certain pundits jumped all over "falling sales" of the original iPhone during the months when inventory levels dried up completely.

[ View this article at AppleInsider.com ]

[anantksundaram]

Originally Posted by AppleInsider

"AT&T is restricting the No-Commit price to existing customers who wish to add a line, purchase as a gift, or perform and [sic] upgrade and are not eligible for the Qualified or Early upgrade price."

That will be all of 3 people?

Sounds like ATT trying to make some non-news.....

[Dlux]

Would these phones be fully unlocked at that price? If so, it would be an interesting experiment to see how much people really want to free themselves from the lock/subsidy treadmill and start treating mobile handsets like something they actually own (like their computers).

[Johnny Mozzarella]

I want 3G call quality without 3G data plan pricing.
I like my current $20/month data plan, but not the lousy call quality of the first gen iPhone.
I'll wait to see what comes out this summer.

[TranceMist]

T-Mobile offered me an unlimited nationwide voice plan for $49.

Presumably to keep me from going to AT&T.

The catch? 2-year contract required.

Mine just expired in January.

No thanks T-Mobile, I prefer to be free.

[zunx]

Free to use with any provider or locked to AT&T? That is the key difference, not only the lack of contract!

[dommy-D]

What we need in the US is pre-pay data packages. Salespeople in the stores seem to think it's laughable that anyone would want that. They sent me packing. No probs in the UK, mainland Europe and even the UAE.

[CU10]

Originally Posted by zunx

Free to use with any provider or locked to AT&T? That is the key difference, not only the lack of contract!

Hallelujah. Who knows, but at least for now it's contract-free; making it a similar device to the iPod Touch until the user wants to make it a phone. Perhaps the iPod touch might even get discontinued!

[dualie]

Originally Posted by dommy-D

What we need in the US is pre-pay data packages. Salespeople in the stores seem to think it's laughable that anyone would want that. They sent me packing. No probs in the UK, mainland Europe and even the UAE.

I have a pre-paid data plan with AT&T. It's the ONLY way I will do business with that company. Of course it also means I can't use an iPhone, but c'est la vie. I don't need one so badly that I'm willing to compromise my principles.

[macFanDave]

I already have that. . . kind of. I've got very limited 3G service -- it's missing quite often and other times it is as slow as EDGE. I'm glad I'll be able to CHOOSE limited 3G service and not have the commitment, because now I am stuck with limited 3G service and have the commitment.

[teckstud]

SAY WHA?

[georgetang]

Hahaha...

I'm sure AT&T got words from Apple

Apple would release a killer new gen iphone. With more processor power, better battery life (improvement learned from 17 MBP), probably include video recording, more capacity, iChat AV Mobile (front video camera).

That's why AT&T must start cleaning inventories, and why not make extra $$$ while doing so.

[iVlad]

this is how apple is gonna clear their inventory of iPhone 3G to make room for the new iPhone in June.

[teckstud]

Originally Posted by iVlad

this is how apple is gonna clear their inventory of iPhone 3G to make room for the new iPhone in June.

genius

Oh Apple invented the clearance sale now?

[robogobo]

Originally Posted by dualie

I have a pre-paid data plan with AT&T. It's the ONLY way I will do business with that company. Of course it also means I can't use an iPhone, but c'est la vie. I don't need one so badly that I'm willing to compromise my principles.

just buy a used iPhone and, *gulp*, jailbreak it.

[TBell]

Personally, I don't get this sentiment. AT&T is the king of trying to get you into contracts. T-Mobile doesn't force you to sign a contract once your initial contract expires.

I for one love the iPhone. I, however, don't love it enough to pay AT&T that data plan pricing that I wouldn't use and is too expensive considering I wouldn't use it that much. Moreover, AT&T is a horrible company in so many ways.

I'm currently stuck using my first generation iPhone on T-Mobile. Maybe this deal will let me stick with T-Mobile.

Originally Posted by TranceMist

T-Mobile offered me an unlimited nationwide voice plan for $49.

Presumably to keep me from going to AT&T.

The catch? 2-year contract required.

Mine just expired in January.

No thanks T-Mobile, I prefer to be free.

[coasterswim]

How is this a good deal?

8GB iPhone: $199 + $14 tax = $214
Activation: $36
One month service: $70 + $4 tax = $74
Cancellation Fee: $175

Total for work-around "no-contract" iPhone: $499

Total for AT&T's actual no-contract iPhone: $599 + $41 tax = $641

[krreagan]

How long is Apples agreement with ATT? I've heard 2 years and (gulp!) 5 years. If it's two, then we are almost there...

Is it possible that ATT is going to start this sort of opening up of service in the months before their exclusive contract comes to an end in an effort to lock people into ATT? Boy I can't wait for their to be competition!

KRR

[mdriftmeyer]

Apple and AT&T are in the middle of an exclusive contract. Use your brain for a moment when you ask about unlocked, next time.

[zeromeus]

To get an UNLOCKED iPhone 3G, all I have to do is go out to a local store and pay $500 for an 8GB iPhone or $600 for a 16GB one. They give me an iPhone 3G unlocked and ready to be used with ANY GSM carrier I wish. Why pay $600+tax+activation+data plan for such a device? Yeah! That's what I thought!

I'll pass!

[cameronj]

Originally Posted by krreagan

How long is Apples agreement with ATT? I've heard 2 years and (gulp!) 5 years. If it's two, then we are almost there...

Is it possible that ATT is going to start this sort of opening up of service in the months before their exclusive contract comes to an end in an effort to lock people into ATT? Boy I can't wait for their to be competition!

KRR

No one knows how long.

There is competition, by the way. It's called the G1, the Pre, Verizon and Sprint. Just because the competition doesn't offer a better product/service combination doesn't mean there's no competition.

[rdhaag]

This is the exact same deal as with all their handsets. You can get the 2 Year price (advertised price), early upgrade price ($75 above advertised price) or full price (no contract needed). AT&T offers this on every phone they have. The pricing is just a bit different on iPhone 3G.

iPhone 3G 8GB
$199 2 year price
$399 Early upgrade price
$599 No contract price

16 GB is always $100 more

[krreagan]

Originally Posted by cameronj

No one knows how long.

There is competition, by the way. It's called the G1, the Pre, Verizon and Sprint. Just because the competition doesn't offer a better product/service combination doesn't mean there's no competition.

Not within the iPhone sphere! The iPhone on multiple carriers in the same market is the compitition I'm talking about! The G1, Pre... all suck FTMP. The G1 is Android while not bad it will suffer from the same usability and instability issues as Linux as a whole. And the Pre is backed by Palm... nuf said! While they are "competition" there is no comparison with the iPhone and from what I see these will never be IMO.

KRR

[CU10]

Originally Posted by coasterswim

How is this a good deal?

8GB iPhone: $199 + $14 tax = $214
...
Total for work-around "no-contract" iPhone: $499 [$142 less than no-contract iPhone]

Good point. Maybe AT&T will drop the price. BTW, does the work-around result in an iPod-touch-like device (ie, just an iPhone without a cell-contract)?

[Dlux]

Originally Posted by coasterswim

8GB iPhone: $199 + $14 tax = $214
Activation: $36
One month service: $70 + $4 tax = $74
Cancellation Fee: $175

Total for work-around "no-contract" iPhone: $499

Total for AT&T's actual no-contract iPhone: $599 + $41 tax = $641

Thanks for spelling that out. Just curious - what tax location are you using for those figures?

Incidentally, you can apparently use other AT&T SIMs in a US iPhone, including one from a lower-priced plan, even without data. The trick is to make sure you turn off cellular data access to prevent enormous monthly bills. (Wifi access is fine.)

[solipsism]

Originally Posted by CU10

BTW, does the work-around result in an iPod-touch-like device (ie, just an iPhone without a cell-contract)?

Yes. If you want cell service with 3G in the US from a major carrier you'll have to sign up with AT&T and you'll get no different rate so the cost to value is pointless.

You can easily unlock it with Pwnage to use outside the US, on T-Mobile, with another AT&T SIM that can get different plans (like no data) or with GSM-based MVNOs. I don't see any of these as being very viable. The MVNOs don't have good coverage but you can get prepaid SIMs, but lose the best aspect of the iPhone with is the interneting capabilities. T-Mobile uses a different 3G radio so you'll only get EDGE with them, but it could be of interest to original iPhone users on T-Mobile who want more capacity and GPS (and who have a lto of disposable income).

The idea is great, but you can cancel at an time for a fee that does reduce by $5 per month. And as pointed out it cheaper to get the iPhone and cancel service instead of this option.

[coasterswim]

Originally Posted by Dlux

Thanks for spelling that out. Just curious - what tax location are you using for those figures?

7% (north Fulton County, GA)

[TBell]

To me an unlocked phone means you get the carrier's blessing to go anywhere with the phone. So if I want to stick a T-Mobile card in there I am good. When you buy a locked iPhone and cancel the Contract you don't end up with an unlocked iPhone.

[bokuwaomar]

Originally Posted by solipsism

Yes. If you want cell service with 3G in the US from a major carrier you'll have to sign up with AT&T and you'll get no different rate so the cost to value is pointless.

You can easily unlock it with Pwnage to use outside the US, on T-Mobile, with another AT&T SIM that can get different plans (like no data) or with GSM-based MVNOs. I don't see any of these as being very viable. The MVNOs don't have good coverage but you can get prepaid SIMs, but lose the best aspect of the iPhone with is the interneting capabilities. T-Mobile uses a different 3G radio so you'll only get EDGE with them, but it could be of interest to original iPhone users on T-Mobile who want more capacity and GPS (and who have a lto of disposable income).

The idea is great, but you can cancel at an time for a fee that does reduce by $5 per month. And as pointed out it cheaper to get the iPhone and cancel service instead of this option.

16GB iPod Touch: $299.99
subsidised 16GB iPhone: $299.99
rumored unsubsidised 16GB iPhone: $699.99?

Something doesn't seem right. Standard phone subsidies are usually no greater than $200, and often less. If that price is real (and from the looks of the early upgrade price, it probably is), then it will be clear that subsidies are being used to artificially inflate contract-free prices. I'm pretty damn sure adding phone parts and a crappy camera to the iPod Touch does not warrant a $400 premium.

[charlituna]

Originally Posted by Dlux

Would these phones be fully unlocked at that price?

highly doubt it. they will likely still be only legally serviced by ATT. so if you unlock it yourself and it breaks you are screwed cause you voided your warranty with Apple.

and what's a hoot is that it is possible that the whole reason all they talked about yesterday was software is because that is all that will be released this year. as in no new hardware. Apple isn't going to tell folks that kind of stuff ahead of time cause they know that it will be leaked to the public. It always is. So these places are trying to sell out on the guess that cause there was a new phone over the last two years there will 100% be one this year. even though there's no 4g phone service to speak of or anything else to warrant a brand new device. most of the improvements are software based and that's what was just announced -- a bunch of software improvements.

[Murphster]

Originally Posted by bokuwaomar

16GB iPod Touch: $299.99
subsidised 16GB iPhone: $299.99
rumored unsubsidised 16GB iPhone: $699.99?

Something doesn't seem right. Standard phone subsidies are usually no greater than $200, and often less. If that price is real (and from the looks of the early upgrade price, it probably is), then it will be clear that subsidies are being used to artificially inflate contract-free prices. I'm pretty damn sure adding phone parts and a crappy camera to the iPod Touch does not warrant a $400 premium.

Listen.....

Can you hear it......

......................................[sound of penny dropping]


There have been those of us that have been saying this ever since the first iPhone was released. Of course the contract cost includes the price of the phone. How anybody ever doubted that I am amazed. Subsidies are not usually limited to $200. In Europe you always got free phones, some of them worth up to $500 contract free.

This goes back to those Apple ads saying same phone half the price, go back and read the threads.

They have been selling the iPhone 3G in Australia SIM free since its launch and back then it was over $700 to buy.

Why is it nobody ever listens on these forums, it seems people are incapable of challenging Apple's word - If SJ says it it must be true!

The real cost of the iPhone has always been about this price, I am not the only one who repeatedly said this on here in the face of all the non believers.

[DavidW]

Originally Posted by bokuwaomar

16GB iPod Touch: $299.99
subsidised 16GB iPhone: $299.99
rumored unsubsidised 16GB iPhone: $699.99?

Something doesn't seem right. Standard phone subsidies are usually no greater than $200, and often less. If that price is real (and from the looks of the early upgrade price, it probably is), then it will be clear that subsidies are being used to artificially inflate contract-free prices. I'm pretty damn sure adding phone parts and a crappy camera to the iPod Touch does not warrant a $400 premium.

ATT is most likely including the profit they lost by not having to commit to a two year contract when some one buy the 16G iPhone for $699. So if you do the math. ATT makes about $400 profit on a two year, $70/month, Voice/Data plan. Maybe more. They sacrifice $200 of this profit to subsidize a phone (don't matter who's phone.) They pay Apple $499 for the 16G iPhone. They still make $200 profit on the plan. They add the $200 of lost profit to their cost of the 16G iPhone and sell it for $699 (without a contract).

Just because a carrier subsidizes a phone with a contract doesn't mean that they are losing money on that contract. They are in business to make money.

[lfmorrison]

Originally Posted by Dlux

Would these phones be fully unlocked at that price? If so, it would be an interesting experiment to see how much people really want to free themselves from the lock/subsidy treadmill and start treating mobile handsets like something they actually own (like their computers).

My guess, if this rumor proves to be true: It would almost certainly NOT be "unlocked".

It would simply be a run-of-the-mill iPhone, restricted to only accepting AT&T SIM cards just like all the other iPhones sold in the USA. The only distinguishing factor would be that you wouldn't have to commit to a new 2-year contract, but could rather be allowed to simply use it on your existing contract without extending it. Or else you'd be able to enter into a month-to-month service agreement which can be cancelled at any time without penalty.

Take a look at all the other "no-commitment" cell phones AT&T sells. (GoPhone anyone?) They're all still sold with a SIM lock out of the box.

Originally Posted by charlituna

...they will likely still be only legally serviced by ATT...

I wouldn't go that far. At least until October 27, 2009, it is not illegal to unlock a cell phone without the carrier's or manufacturer's blessing. In that sense, it is totally legal to get service from any carrier willing to take you on.

On the other hand, just because it isn't illegal doesn't mean there won't be repercussions. As you mentioned, the voided warranty is one such consequence.

[ivan.rnn01]

we can redeem our fidelity points for new shining iPhone 3G

[hiimamac]

When I performed work directly at Apple retail, (yes they were that busy, remember the lines, LOL), AT&T allowed early first gen to qualify for new phone at $199. Question is, wouldn't it behoove Apple to allow all iPhone users to upgrade seeing how of would lock them in for 2 more years? Or since pay $199, are some up a creek? I think early termination is less than buying a new phone and if the Pre is all that and AT&T loses business simply due to business model, not to mention all the mac specialists tell customers that they will be able to upgrade, not realizing the first gen users paid a premium price, you have to wonder if Apple/At&T are about to have a logistical user base 2nd gen headache.

I can see all the 2nd gen users complaining they were told the wrong info. Yikes.

Thoughts?

Originally Posted by AppleInsider

AT&T will begin offering "no commitment" pricing on the iPhone 3G beginning on March 26, without any service contract requirement, according to a report leaking an internal company training memo.

The report, posted by Boy Genius, says that AT&T will only offer the iPhone 3G at its "no commit" price of $599 for the 8GB version or $699 for the 16GB model to existing customers, and limit them to one unit each at that price.

However, the document also notes that AT&T has no way of tracking if the user has already bought a unit at the no commit price within the company's billing system, although AT&T retail stores "can see the transaction through OPUS [AT&T's point of sale system] if the device was purchased through AT&T COR [a company-operated retail store]."

The document says "AT&T is restricting the No-Commit price to existing customers who wish to add a line, purchase as a gift, or perform and [sic] upgrade and are not eligible for the Qualified or Early upgrade price."

"Qualified pricing" refers to the standard $199/$299 price of the iPhone 3G when obtained with a two year contract commitment. For AT&T users who recently received a contract subsidized phone of any kind, AT&T charges an "Early Upgrade price" that is $200 more than the iPhone 3G's qualified price: $399/$499. It also requires a two year contract extension.

The no-committment iPhone models from AT&T incur a device activation fee when used with AT&T's service, and also require a data plan, although device activation is not required at the point of sale.

The new "no-commit" sales program appears to be an effort to push out remaining iPhone 3G inventory prior to the launch of the next iPhone, due sometime this summer. Last year, Apple similarly allowed the existing inventory of iPhones to dry up to the point where almost no iPhones were left for several weeks prior to the launch of iPhone 3G.

Other iPhone 3G partners are similarly discounting iPhone sales to move inventory, which has resulted in various dire rumors about the iPhone's prospects, not unlike last year when certain pundits jumped all over "falling sales" of the original iPhone during the months when inventory levels dried up completely.

[ View this article at AppleInsider.com ]

[hiimamac]

Originally Posted by hiimamac

When I performed work directly at Apple retail, (yes they were that busy, remember the lines, LOL), AT&T allowed early first gen to qualify for new phone at $199. Question is, wouldn't it behoove Apple to allow all iPhone users to upgrade seeing how of would lock them in for 2 more years? Or since pay $199, are some up a creek? I think early termination is less than buying a new phone and if the Pre is all that and AT&T loses business simply due to business model, not to mention all the mac specialists tell customers that they will be able to upgrade, not realizing the first gen users paid a premium price, you have to wonder if Apple/At&T are about to have a logistical user base 2nd gen headache.

I can see all the 2nd gen users complaining they were told the wrong info. Yikes.

Thoughts?

Then again for me as a high end boutique IT firm, I wonder what the price will be. My wife has a line and never got the 3G, and would glad take this one and let me get the new phone. I wonder what new hardware the new phone will have.

Still, I would advise you to wait a few weeks after it comes out. Many new customers were told they could upgrade ala wrong infomation, so the policy could change, especially if Apple had some pull and 3G users complain. We shall see.

[coasterswim]

Originally Posted by hiimamac

Question is, wouldn't it behoove Apple to allow all iPhone users to upgrade seeing how of would lock them in for 2 more years?

It wouldn't affect Apple. Also, I still don't comprehend how people still can't realize that the original iPhone was not subsidized, but the 3G was. In AT&T's eyes, 3G owners "owe them" back for the phone, so they will pay the not-upgrade-eligible price just like the rest of us.

[pan88@mac.com]

All very nice, those new features in 3.0. The technocrats at Apple however miss the real issue totally! The biggest obstacle for the iPhone remains its limited use for travelers due to insane roaming charges!

An AT&T no-contract option (it already exists in Hong Kong, where Apple sells unlocked iPhones) would be a solution, but, -alas-, some Telecoms such as Soft Bank in Japan have tinkered their SIMs so that they dont work, unless you BUY an iPhone from them, although the same SIMs work on any other phones.

I, as probably most iPhone users would accept to pay for ONE contract with ONE Telecom or even an extra "tax" for using an alternate prepaid SIM in order to avoid roaming charges that can easily reach several thousand dollars-per-month, especially if you use such useful features such as Google maps, LookItUp, etc.

Its the perfect rip-off and it seems that Apple condones it!
Splitting my time between Europe and Japan, I have long lost my enthousiasm for the iPhone and no upgrades whatsoever will change that, until Apple has brought their Telecom partners to reason.

This issue may not concern most US-users but Apple should be aware that it seriously cools down the interest of European and Asian consumers who are often crossing borders.

[hill60]

I've got an Australian one on contract, it was locked when I first got it all I had to do was go to my phone companies website (Vodafone) and enter my IMEI, after that I did a restore, now I can use any SIM I want.

They don't sell outright iPhone's, two companies do Optus and Virgin although you pay an unlocking fee, I don't know about the other company Telstra, they started selling them outright but stopped after regulators here let people unlock for free due to the wording of their marketing material.

You can even hotswap SIM's, which I haven't seen on another phone.

P.S. Don't make the mistake I made and leave the wrong SIM in when testing this $100 pre-pay credit gone in a few hours of web browsing!

Originally Posted by pan88@mac.com

All very nice, those new features in 3.0. The technocrats at Apple however miss the real issue totally! The biggest obstacle for the iPhone remains its limited use for travelers due to insane roaming charges!

An AT&T no-contract option (it already exists in Hong Kong, where Apple sells unlocked iPhones) would be a solution, but, -alas-, some Telecoms such as Soft Bank in Japan have tinkered their SIMs so that they dont work, unless you BUY an iPhone from them, although the same SIMs work on any other phones.

I, as probably most iPhone users would accept to pay for ONE contract with ONE Telecom or even an extra "tax" for using an alternate prepaid SIM in order to avoid roaming charges that can easily reach several thousand dollars-per-month, especially if you use such useful features such as Google maps, LookItUp, etc.

Its the perfect rip-off and it seems that Apple condones it!
Splitting my time between Europe and Japan, I have long lost my enthousiasm for the iPhone and no upgrades whatsoever will change that, until Apple has brought their Telecom partners to reason.

This issue may not concern most US-users but Apple should be aware that it seriously cools down the interest of European and Asian consumers who are often crossing borders.