AT&T to Sell New iPhones Minus Contracts

AT&T Inc. today said it will sell Apple's iPhone 3G to customers without requiring a two-year contract sometime "in the future" at marked-up prices of $599 for the 8GB model and $699 for the 16GB device.

When asked for more information, an AT&T spokesman said today that the company is not yet sharing details about the no-contract deal or laying out a timetable.

Less than two weeks before the launch of Apple Inc.'s new iPhone, AT&T did spell out pricing for the iPhone and related service plans in a statement posted on its Web site.

AT&T reiterated that the iPhone 3G will be available for discounted prices of $199 (8GB) and $299 (16GB) to certain customers starting July 11, and it clarified which customers will be able to buy it at those prices. "These prices require two-year contracts and are available to the following customers," said AT&T, citing "iPhone customers who purchased before July 11, customers activating a new line with AT&T [and] current AT&T customers who are eligible, at the time of purchase, for an upgrade discount."

The mobile operator, which is Apple Inc.'s exclusive network partner in the U.S., also explained how it will determine whether a customer qualifies for the subsidized prices. "Eligibility for the upgrade discount typically involves a number of factors, including how long you have been in your current service agreement, your payment history, for example, prompt payment of bills, and more," said AT&T spokesman Wes Warnock in an e-mail today. "In general, you are more likely to qualify if you are at or near the end of your current service agreement and pay your wireless bills promptly."

Customers not eligible for the discounted prices will have to pay $499 for the 8GB iPhone 3G or $599 for the 16GB model, and they will still be required to ink a two-year contract with the carrier.

The $300 and $400 differences between the iPhone 3G's subsidized prices and those offered to ineligible AT&T customers and buyers who don't sign a contract are in line with estimates analysts have made about how much the carrier is paying Apple for each device.

AT&T outlined iPhone service plans that include $69.99, $89.99, $109.99 and $129.99 schemes offering 450, 900, 1,350 and unlimited minutes, respectively. As expected, those plans do not include text messaging. To add texting to their plans, iPhone 3G users will have to pay a minimum of $5 monthly -- for 200 messages -- to as much as $20 monthly for unlimited messaging.

AT&T included 200 text messages in the plans for last year's first-generation iPhone, but it has stopped that practice.

AT&T also said that it would start selling the iPhone 3G July 11 at 8 a.m. local time, and it said current iPhone owners with AT&T contracts will be charged an $18 upgrade fee when they signed up for another two-year deal. Warnock said the upgrade charge is standard practice for AT&T; it covers administrative and technical costs, he explained.