Tied sales are illegal. It is illegal to tie the sale of a product with a service so that, if you want to buy and own the product, you must subscribe to the service.
This is the difference between the phone you buy and own versus a rented phone service.
Sorry, Apple, but manic Steve MUST OBEY ANTITRUST laws.
They have managed to do this in other European countries (UK, Germany) right from the start, and over here in Europe, there are much strong anti trust laws than in the US.
It cracks me up all you Americans whinging that you can't take it for $199 and not have a contract. You people need to get real. $199 without a contract is never going to happen, the hardware is worth far more than that. Everyone else in the world has had to sign the contract when they bought the phone right from the start. This is just the way it is when you get subsidised hardware!