AT&T to Sell the iPhone without a Two-Year Agreement
Jacksonville – For those who have been waiting to buy themselves an iPhone but have not been willing or able to commit themselves to a two year contract with AT&T, good news is finally on the horizon. AT&T just announced that starting Thursday, March 26th, the iPhone will be available for purchase without a two year contract. The iPhone can be picked up in stores for $599-$699, depending on the model purchased.
Further incentive for purchasing the iPhone this Thursday is that owners now have the option of activating their new phone from the iTunes store, rather than from an AT&T store or kiosk, making the iPhone more convenient to give as a gift.
However, being able to purchase an iPhone without a two year contract does not mean that one can escape using AT&T entirely. The iPhone will not be unlocked, which means that it must still be used with AT&T’s service (unless the purchaser chooses to hack their phone, which is not recommended). For those who wish to purchase the iPhone without the two year contract and not pay for AT&T’s phone service, the iPhone then simply becomes a rather tricked-out iPod touch, still usable but certainly not using the iPhone to its full potential.
What it does mean, however, is that an iPhone user may now sign up for a month-to-month payment plan rather than being stuck with a two year contract and the possibility of a $175 early termination fee should they choose to opt out before their two years are up.
For those who have done the math, though, it does not seem like this new promotion is worth as much as it appears to. The cost of purchasing an unsubsidized iPhone (that is, without the contract) is $599 for the 8 gig model. The cost of purchasing the same phone for the subsidized price (with the contract), including the cost of the early termination fee (which can be up to $175) is over $100 cheaper than the purchase of the iPhone without the contract. This price includes a month of AT&T phone service, the minimum necessary to be allowed to keep the phone. Canceling the iPhone service before thirty days is up requires the user to return the iPhone to AT&T.
There is some speculation that this announcement from AT&T is actually intended to encourage the sales of the iPhone with the two year contract by selling the contract-free iPhone at a higher rate, thus further emphasizing the better deal of the subsidized phone.
Another important factor to keep in mind when the month-to-month contract is released next week is that this contract option is only available to those who are already AT&T customers. Anyone wishing to move to AT&T from another service provider in order to purchase the iPhone will still need to do so by purchasing the two year contract.
I wonder if Rogers in Canada will offer this too