Report: AT&T ready with no-contract iPhone offer

Would you pay $599 for an iPhone without a contract?

(Credit: CNET)

AT&T may be getting ready to offer the iPhone 3G at a very expensive yet no-commitment price.

The Boy Genius Report has a report out Wednesday that AT&T plans to offer iPhone 3Gs at $599 or $699 without requiring the customer to sign a new two-year agreement, starting next week. When the iPhone 3G launched last year, AT&T said it would offer such an option, but never pulled the trigger.

An AT&T representative declined to comment on the report.

The move would seem designed to rid AT&T of iPhone inventory ahead of the launch of a new product later this summer, as most of us are expecting. Apple didn't allude to any new hardware during its iPhone 3.0 event on Tuesday, but there have been a few signs, and the company has noted that iPhone releases seem to be falling into a yearly schedule around June or July.

iPhones sales soared after Apple and AT&T cut the starting price to $199 last year, but there are definitely some people who would like an iPhone free from AT&T and a two-year commitment to paying a monthly wireless bill, even if it costs them more up front.

Would you buy a $599 8GB iPhone if it meant you didn't have to sign a two-year contract?

[dr_modean]

"Would you buy a $599 8GB iPhone if it meant you didn't have to sign a two-year contract?"

Only if I could put it on Verizon.

[Republic512]

Exactly. I would buy any phone at any price as long as it was contract and provider free.

[_eclectic_]

+1

[mediocrates--2008]

And while we're unlocking and jail braking the phone, and making it free of contracts, let's go the final step and free the OS from proprietary licensing as well.

Then we could call it Android.

[patrick_i]

Android, huh? Hmmm interface looks mighty famiiar. Touchscreen, eh? Funny how people always measure up a phone against an iPhone but then comment on how inferior the iPhone is, never stopping to think that the iPhone was undoubtedly the inspiration for the design. Remember folks, the iPhone isn't just about the features. Any monkey can come up with a hundred features to put in a phone, but only Apple has the discipline to make it truly useable and user friendly. Typical American "more is better even though i don't need it/use it" attitude.

[stigmattaman]

@mediocrates

Uhhh, Android can have proprietary licensing. Carriers and handset makers can tailor it, and license it as well. Android itself is open source, but if you ever want to buy it from a big-time manufacturer or carrier, it's not really.

[rob1400]

Will those phones be unlocked and work with other carriers also? I guess that is the more important question. Wonder if AT&T will sell those phones to be used with other carriers. I guess it will be Apple, not AT&T, to sell unlocked phones.

[timber2005]

It seems it should. I mean... if you get an iphone that is contractless, what's the point of it being contractless if all you have is one choice??

Maybe that is their plan... how evil!

[walterhutchens]

Offering it without a service contract may NOT mean it is offered "unlocked." Probably they will just let you pay for the service month-to-month, but you'll probably still have to jailbreak the phone in some unauthorized way to use it with another carrier. This failure to separate sale of handsets from carriers is the worst thing about the US mobile market. Doesn't work this way in Asia.

[walterhutchens]

Offering it without a service contract may NOT mean it is offered "unlocked." Probably they will just let you pay for the service month-to-month, but you'll probably still have to jailbreak the phone in some unauthorized way to use it with another carrier. This failure to separate sale of handsets from carriers is the worst thing about the US mobile market. Doesn't work this way in Asia.

[AL-Graphic]

Verizon & AT&T, even with T-Mobil, all 3 using different bendwidth 3G networks, AT&T just want you to pay more $ if you didn't want to sign with 2 yrs. contract, but your calling network still will be isnide AT&T network. This is not a unlock phone at all.

[garimell]

Not sure why a lot of folks fret so much about the fact that the iPhone locks you in with AT&T. No one's surely in a contract with other carriers that's longer than 2 years; so, if you badly want the iPhone and are not with AT&T already, either wait out your contract or break it (which would probably cost you no more than $175). Why the fuss? Is it a philosophical mindset that you don't want to be locked in to a carrier? In any case, what are your other options vis-a-vis a GSM carrier? T-Mobile is much lamer than AT&T. And, not going with a data plan and wanting to use the iPhone only in a Wi-Fi setting is quite illogical - you can go get an iPod Touch for barely over $200, no?!

[techman21]

An iPod Touch doesn't make phone calls though, right? The data plan is the worst part of the deal - if I could use Wi-Fi only (plus phone), that would be great! I'm in a hotspot almost all day long anyway.

[markredf150]

Techman, there's an app out there called Fring that you can use to make VOIP calls on an iPod Touch as long as you have a microphone

[crash110513]

The point is that some of us like our carrier tmobile happens to work much better where i live and in some cases at&t doesn't have the whole country covered I have a friend in maine that can not get one because at&t doesn't service his area but he can get tmobile

[Cville-Virginia]

I want another carrier because AT&T has very limited and slow coverage in Charlottesville, VA. I had to buy 4 non-iPhones last year for my company and chose US Cellular because they have good coverage. I'd have bought iPhones if only I could actually use the darn thing where I live!

[Perry_Clease]

"The move would seem designed to rid AT&T of iPhone inventory ahead of the launch of a new product later this summer, as most of us are expecting. "

I don't think that Apple keeps a lot of product in inventory.

[Zippy-T-Pinhead]

Whatever inventory Apple has, they historically try to dump it prior to launch of new hardware.

[Perry_Clease]

"Whatever inventory Apple has, they historically try to dump it prior to launch of new hardware."

Dump it where, Big Lots! or SirPlus AreUs? Historically they keep a few days of supply on hand and build up as needed, they are one of the best supply chain management.

[patrick_i]

... and Apple warns their stores, retailers, etc. about reduced shipments of a current model. I assume the stores know what's coming because obviously the staff would need training before the new product gets on the retail floor.

[Atizer2]

It doesn't matter what kind of inventory Apply keeps. The article talking about AT&T's inventory. Wouldn't surprise me to learn that they have too much in inventory.

[Mr_Rage]

As an iphone developer it would be helpful to have two devices and one account so that one device can be kept on bata firmware while your developing against frameworks that are not available otherwise. It is a little bit of a pain to swap sim whenever you switch devices but still might be worth it, in order not to pay for two plans.

I have an ipod touch for most development cases, but having access to Core Location from an iphone would helpful for my current project.

[ThreeMilesNorth]

Please proofread. people, ehh, iPhone developer?

[Beobe]

Just make the data plan optional and everybody will be happy...

[dpchris]

Even if it is unlocked, your options are limited. It won't work on Verizon or Sprint, and it won't have 3G with T-Mobile. I would like to see the separation of phone and provider like it is in Europe in Asia, but until next generation (when Verizon moves to LTE) it's pretty much meaningless.

[FellowConspirator]

I don't get why the market tolerates lock-in here in the USA. It's not specific to the iPhone, most phones have their firmware hacked to be locked to a particular provider. That makes no sense from the consumer perspective and I suppose the situation persists precisely because there's no advocate for the consumer.

Apple goes one better and locks up their phone to use only approved apps... I understand the incentive behind that too, but how does that benefit the consumer? Obviously it doesn't, but where's the advocate or regulator that makes sure that jail-breaking is legal, or decides that the lock-in constitutes an infringement of the customer's rights with respect to use of hardware they own.

[iff2mastamatt]

I guess it will be pay as you go. I would've bought it but I just bought a Nokia E71.

[jimmyhoops]

I don't get all the anti-ATT B.S. I suppose if you are locked into a current contract that breaking it would have early ending contract fees associated with it. But when you calculate any extra monthly fees relative to the extra money laid out for a non-contract phone, the price becomes a moot point. Since you will have to factor in the extra couple hundred bucks for the upfront price of the phone pro-rated over the life of the service provider you happen to cherish.

The exception to this, of course, would be if ATT doesn't provide good service to your area and you really want an iPhone. But I've yet to be in an area where a friend's phone from another provider had superior coverage to my own. But that's just my personal experience and I don't expect that to be the same for everyone.

When you weigh in the cost of a non-contract iPhone with a contracted version, it becomes proverbial 6 in one, half dozen another. I had Verizon for years before getting my iPhone and can not say with any degree of certainty that Verizon's service is any better or worse than ATT's. I think the whole argument is bunk and people are moaning just to moan!

[eusmani]

I travel all over the country. AT&Ts service network is patchy, I had AT&T for a few years and did need it because of the requirements of being able to use the phone abroad. Now I have T-Mobile and the difference is night and day. Verizon would probably be better for within the US but their operating system does not work abroad. I think Apple made a huge mistake by tying itself down to one carrier. Now other developers have wisened up and many clones have permeated the market thereby making the iphone slightly redundant. Way to go Apple.

[trey2trey]

how will the tex messages work on the ipod touch? any ideas?

[jasomar23]

Why wouldn't you just pay the 199.00 and get into a contract, then pay the 175 early cancel fee if you wanted to get out? My math it is still cheaper than 599. Morons...

[dude7895]

I'm not sue if this is the same for AT&T but for verizon, when you cancel a contract early you have to pay the full price of the phone.

[2ndfallout]

That is exactly what I was thinking. If people actually fall for this they are idiots!

[ElectricJoeNJ]

the other guy who responded to this comment is a complete moron. Ive had verizon and att.. When you cancel your contract you only pay the early termination fee.. Usually 175 dollars. This fee is lowered by a rate of $5 per month that youve had the contract.. You never will have to pay the full retail price. Now, granted in some situations this could be more that the retail price if you have a cheap phone..

[blusky08]

If you read the fine print, I do believe that AT&T has a clause that covers just such a situation.
Indeed, they can charge you for the cost of the phone.

[bassboat8]

doing business with AT&T is akin to doing business with the devil. This is the major gaff that Steve had done in the resurrection of Apple from the 90's. It's a shame that the iphone is only available from AT&T for wireless service. The moment my contract is up I will head for the hills if their is another carrier available that won't mess up my iphone. I am a very unhappy applehead.

[ddhboy]

The iPhone is cool and all but I'll hold out for a while, I'm in contract with t-mobile for a while, and even when that runs out I don't think that I'd want to switch to AT&T given the ridiculous fees they charge, and I'd have to see how rivals palm and android pan out in the coming year. The iPhone lives by "innovation" but to me they're stagnating between generations and it will be the competition that comes out with something innovative and then apple will be forced to play catch up.

I personally don't mind signing 2 yr. contracts, but from the number of iphones being sold on ebay for upwards of $400 I would say they'll do ok.

[JCPayne]

AT&T had to do this... I believe they had a wall street downgrade of their company last week. Additonally, Verizon Wireless is now the largest wireless co. In the U.S... Further, almost all Americans have chosen a Wireless provider already and theres not many left. (Do the math- ATT+VZW have ~85million each.) Thats about 170 million for those two alone. Sprint is something like 50Mil. TMobile must be coming up to that much now, you have some state-level and regional wireless Cos. And-- the U.S. Population is only 300 million) It is obvious that the new "Mom-bell" company has to do something drastic quickly if they want to be the largest wireless company in the U.S. again.

[Zaunto]

$599 to $699 for a Smartphone? Those prices were common for Windows mobile smart phones a few years ago but not any more. While you may argue that the user experience on the iPhone is better or not the fact that the iPhone still doesn't do things that basic cell phones do (copy and paste, MM messaging) or have features that less expensive smart phones have (java, flash, removable battery), I don't see the value in paying double the price for a smart phone that offers less just because it has an Apple logo on it. Maybe those 73 AIG employees can hurry up and over pay for an iPhone without a contract before Congress over-taxes them for million dollar bonuses they received working for the large insurance company that they did such a great job running into the ground that they had to get bailed out by the government? The rest of us who have more sense than money aren't likely to waste it on a fruit flavored toy.

[idfubar]

We're all one step closer to a pre-paid iPhone! Who-hoo!