AT&T To Offer No-Contract iPhone

rfc1394 writes "While the regular price of an iPhone is $199 if you take a 2-year contract with AT&T, if you're willing to pay a lot more you can get one without a contract. An article in InfoWorld mentions that 'Freedom will come with a price — $599 for an 8GB device and $699 for a 16GB — but this will mark the first time consumers in the United States are able to buy an iPhone without being tied down to a two-year contract. The phone probably would still be locked for use only on AT&T's network, said Jupiter Research analyst Michael Gartenberg. But buyers could choose a pay-as-you-go plan for voice service.' The question still remains, does it make any sense to pay that much for a phone that is still locked to AT&T's network even if you aren't bound to a contract?" Update: 07/05 18:21 GMT by T : An anonymous reader suggests that there is a convoluted but possibly cheaper route to an new, unlocked iPhone.

This is a response to iPhone unlocking...

So I buy a phone outright for $599/$699, or I buy a phone for $199/$299 with a 2 year plan ($36 activation fee) then cancel the contract immediately for $175...net cost $410/$510. Hmmmm.....

Re:This is a response to iPhone unlocking...

Most phone companies have a stipulation in the contract that forces you to return the phone if you cancel the contract soon after starting it. In this case I would think that time would be about 6 months or so - enough time for them to squeeze out the 600/700 dollar cost.

Re:This is a response to iPhone unlocking...

What if the phone gets "stolen"?

Re:This is a response to iPhone unlocking...

Good luck using it when they blacklist the IMEI from their network (and then publish it to the other networks).

Can't say I wouldn't laugh, either - entering into an agreement with every intention of breaking it, and being willing to file a fraudulent police report just to save yourself some money? What a world class fucking citizen you are.

Re:This is a response to iPhone unlocking...

What if the phone gets "stolen"?

Then you might get accused of "fraud".

There's no way (as of yet) to change the iPhone's ESN, so if you report the phone stolen, you can expect the ESN to be barred from US networks (and EU ones, come to think of it) -- and if you try to use it, an alert will be triggered (assuming that AT&T's policies are anything like the policies of the carriers in the EU when it comes to stolen phones.)

Re:This is a response to iPhone unlocking...

You can't buy insurance from the carrier for high dollar phones such as the iPhone. People that buy them will buy another one if it gets stolen ( Well, okay, I'm buying another one to replace my stolen iphone on the 11th ). And its not really profitable for them to charge you a $20 insurance fee for a phone that they actually have to pay for, unlike all the other give-away phones that they don't mind insuraning because they are so cheap that the fee they charge you when you make a claim is more than the phone costs them.

Re:This is a response to iPhone unlocking...

Maybe but in the case of AT&T they do not:

Cancellations/Early Termination Fee: An Early Termination Fee of $175 may be assessed against you in the event that you terminate your Wireless Service Agreement and/or selected plan before the expiration of its term. For Service activated on or after May 25, 2008, the Early Termination Fee will be reduced by $5.00 for each full month toward your minimum term that you complete. You may cancel your service, for any reason and without incurring the Early Termination Fee, within thirty (30) days of signing your Wireless Service Agreement, PROVIDED, however, that if you cancel service you will remain responsible for any service fees and charges incurred. If you cancel within three (3) days of signing your Wireless Service Agreement, you will be entitled to a refund of your activation fee, if any. If you exercise this option, you may be required to return devices and associated accessories purchased in connection with your Wireless Service Agreement.

So you wait until the 4th day.

Re:I don't think so...

This is getting better and better...

They have a special iPhone section ((4) iPHONE TERMS AND CONDITIONS): Terms Applicable to AT&T Nation/FamilyTalk® GSM Plans: Credit approval required. Subscriber must live and have a mailing address within AT&T's owned network coverage area. An early termination fee applies if service is terminated before the end of the contract term. The fee will begin at $175 per device and decrease by $5 each month for the term of the agreement. If phone is returned within 3 days, activation fee will be refunded. If phone is returned within 14 days in like-new condition with all components, early termination fee will be waived. Service may be cancelled after 14 days but within 30 days and early termination fee will be waived, but equipment may not be returned. All other charges apply. Some dealers impose additional fees.

So they explicitly say that you can cancel the service between 14 and 30 days, avoid the early termination fee, but don't have to return the iPhone. As an aside, this section also implies that the "you may be required to return devices" in the other part of the contract indeed only applies to the first 30 day period, but the explicit iPhone section makes the various interpretations of the other section mute for this question.

So, we can buy the iPhone outright for $599/$699 or we can get a contract and cancel it after 14 days (but before 30 days) and pay a net of $235/$335. As my son would say Sweeeet.

Re:This is a response to iPhone unlocking...

You would need to pay for 1 month of your contract ($70 is the cheapest?), if you cancel before 30 days you have to return the phone. Also, there has been no confirmation of the early termination fee being $175 for the iPhone. (if it were to be $175 you would still end up getting the phone a bit cheaper than going with the no commitment option).

Still locked?

Fail

Paging Mr. Hobson...

"does it make any sense to pay that much for a phone that is still locked to AT&T's network even if you aren't bound to a contract?"

As Henry Ford once said of his Model T, "the customer can have any color he wants, so long as it's black." But only a cellphone company could call that a "custom color choice" and charge extra for it.

$80 to cancel in Oz

Australians will enjoy the ability to buy a pre-paid iPhone and unlock it to work on any network for $80.

They have allowed unlocking because the laws here don't allow you to lock a phone to a given provider without a reasonable option.

Re:$80 to cancel in Oz

Australians will enjoy the ability to buy a pre-paid iPhone and unlock it to work on any network for $80.

Yes, but you'll be paying 800 $Aus (just for the phone) to do so, won't you?

at $880 (which is about $840 USD), that's a heck of a difference from the AT&T price!

No lock for no-contract phones

Once you are out of contract, they are required by law to unlock your phone for use on any carrier, so selling a no-contract phone thats locked doesn't make a whole lot of sense, as they'd just have to provide an unlock code at your request anyway. I guess they'll probably do it just to make people who don't know any better use AT&T anyway.

Either way, the price makes buying an unlocked phone absolutely retarded. You pay the $199/$299 and pay the $175 contract early termination fee and save yourself some money. After paying the termination fee, they have to unlock your phone so you can take it where ever you want, sans visual voicemail of course.

Re:No lock for no-contract phones

Once you are out of contract, they are required by law to unlock your phone for use on any carrier

I'm sorry, what law is this?

/. law; similar to the /. girlfriend and laws of economics; otherwise known as "what color is the sky in your world, anyway?"

New 3G Data plan is $30/month

Just FYI... the new data plan with AT&T is $30/month while the old plan (Edge) was only $20/month

SO with the new phone you're already paying $120/year more than previous... which means people are actually paying more money over the 2 year period... $199 + $240 (2 year contract) = $459

Re:New 3G Data plan is $30/month

What's wrong is that it's simply too expensive. I'd like to get an iPhone 3G but there's no way I'm going to pay $70/month for a telephone. $60 was right on my threshold for buying, and $70 is just too much. It may be necessary, reasonable, or whatever, but from my perspective as the customer it's just too much money.

The cell phone situation in the US sucks pretty hard right now for a medium-light user. There's essentially no way to spend less than $45/month (including taxes) on a cell phone, even though I use perhaps 1/5th of my plan. Prepaid might save me a little money, but they don't get to be really sensible until you're calling much less than I am each month.

No pay as you go by my reading

The phone probably would still be locked for use only on AT&T's network, said Jupiter Research analyst Michael Gartenberg. But buyers could choose a pay-as-you-go plan for voice service.

AT&T has explicitly said that even without a contract you still have a locked phone and the same choices for plans [yahoo.com] (i.e. minimum $70 a month +taxes and fees for voice/data, with no sms).

That doesn't sound like pay-as-you-go is allowed to me. Which is a shame, because if it was I might actually be interested. A $500 phone, $30 a month for data, and a hundred bucks for a year worth of minutes and SMSes is a better deal for me than a $200 phone plus $75+taxes+fees every month for more minutes than I use in a year.
AT&T needs to let people who don't use their phone as a phone that much buy what they want.

Re:Why buy an iPhone

Because there's something to be said for having walk-in support at the Apple store, the Apple user interface, access to the app/music store... shall I go on? People buying an iPhone likely aren't buying it based on specs.

Re:Why buy an iPhone

Because the software is shit? No one can even make the example videos of it look like its decent. I expect my phone not to lag, have you seen OpenMoko in use? Its a joke.

I know I'm going to be modded as a flame, but seriously, no one who wants a phone to USE will want OpenMoko. It looks cool as hell from a developer/hacker point of view, one of the guys I work with ( who loves his windows mobile phone, heh ) intends to order one to play with, but he just replaced his old phone with another Windows Mobile phone so he had one that actually worked along side the OM phone he hacks around on.

But ... no one who just wants a usable phone wants to deal with an OS thats ... pre-alpha at the very best, and will come with absolutely 0 support from your carrier.

The people who will buy an OpenMoko device are developers, not users. The people who buy an iPhone are users who don't want to be developers to know how to use their phone. They just want a phone thats intuitive and works.

These two devices do not in any way target the same market at this point in time.

Re:Why buy an iPhone

Are the hardware specifications of a cell phone the only relevant thing? Absolutely not. Hardware defines the device's potential, but the device's quality is determined in a large part by its software. And Openmoko Freerunner's software stack is pretty sucky right now.

Right now Freerunner's battery life is something like 5 hours [openmoko.org], and there are many other issues [slashdot.org].

A great example of why all but a handful of people may prefer an iPhone to a Freerunner is this month's discussion of filesystem images [openmoko.org] on the mailing list. Apparently there's an FSO image ("make and receive calls. That's about it."), an ASU image ("qtopia apps don't start if I have the SIM in the phone"), a GTK image ("more or less what the phone came preloaded with"), a ScaredyCat image ("mostly works"). This should make it pretty clear that a Freerunner is not a consumer-ready device and is definitely NOT an iPhone equivalent.

A Freerunner should only be purchased by those who are fully prepared to deal with it as a hobby rather than as a consumer-ready phone/PDA. Posts like yours are misleading and do a disservice both to the consumer and to the Openmoko project.

Re:iPhone- future of computing or just a phone

Here in the States, you are always locked into a provider, even if the phone is popular enough to be sold be more by than one provider.

No, you can buy a phone directly from a manufacturer without it being locked to a carrier. I purchased my unlocked Z6 from the on-line Motorola store. Of course nobody subsidized me for $175, either, so I paid full price for it. But I now have a phone that I can actually use if I travel abroad and buy a local SIM.

Re:iPhone- future of computing or just a phone

The iPhone is certainly not a general computing device. I love my iPhone, and I actually enjoy the iPhone SDK, but ... it will never replace my laptop when I want to get something done.

Typing on any phone sucks. Some suck less, but they all suck, even the ones with the keyboards that cover the full size of the phone ( HTC Tilt as an example ).

The iPhone does some tasks great. Its a good 'phone' imo. Its obviously a great iPod, some would argue that there are better portable audio players, but I've never used a non-iPod player so my opinion is obviously biased. Its not as good as my old Palm V or Windows Mobile devices for taking notes or managing tasks by a long shot, but it does the job well enough.

With the SDK release, it'll have a few cool/good apps for it come out soon, but its not a PC and never will be.

As far as Palm being great because of open development, this is a double edge sword. Do you know how many absolutely crappy palm apps exist? I'd guess about 10 crappy apps exist for every half way decent app. The advantage to making it 'harder' to developer for the iPhone is that in itself will weed out many of the crappy apps written by people who wont put much effort into it.

With Job's evil grip over apps with the AppStore and digital sigs, some types of malicious apps can be stopped as well.

The only apps that may not be released on the iPhone are ones with a GPLv3 or like license due to the retarded restrictions in it that are supposed to help support my 'freedom' to do what I want with the software, but ARE restrictions to what I can do with it. Any GPLv2 or BSD or (insert any of the thousand other sane distribution licenses here) will be available, if not by the original authors, by someone else who is part of the SDK program, someone will probably make a service for OSS developers who don't have the money to blow on the iphone dev program.

Even GPLv3 apps aren't ruled out. The original authors can do whatever they want with the software, they are not under the restrictions of the distribution license so they CAN release an iPhone version should they choose to, OR, they can grant someone else the right to do so.

BUT ... in all of these, 99% of the apps out there, don't belong on the iPhone. Its a phone/entertainment device, with some basic computing abilities, nothing more.

Re:Canadians

Yup.

Here is Roger's Early Cancellation Fee for the IPhone:

"The ECF is the greater of (ii) $100 or (iii) $20 per month remaining in the service agreement, to a maximum of $400 (plus applicable taxes), and applies on each line in the plan that is terminated."

So waiting a month and then canceling will cost you $700 vs $175 with AT&T

Re:No-contract iPhone

I was in line on I-day 2007

Big "days" in history:

• D Day, 6 June 1944
• VE Day, 7 May, 1945
• I Day, 29 June, 2007

Great moments in time. Well, if you believe the Apple faithful, anyway.