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Apple joins AT&T with no-contract iPhones

Both U.S. iPhone distributors are now offering them without requiring a two-year contract, as AT&T also extends the subsidized price to more subscribers.

Tom Krazit Former Staff writer, CNET News
Tom Krazit writes about the ever-expanding world of Google, as the most prominent company on the Internet defends its search juggernaut while expanding into nearly anything it thinks possible. He has previously written about Apple, the traditional PC industry, and chip companies. E-mail Tom.
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Tom Krazit
2 min read
No-contract iPhones are now available at both Apple and AT&T stores. CNET

Apple has joined AT&T in offering iPhones without a contract at a hefty price.

Last week, AT&T announced plans to sell iPhone 3Gs without a two-year contract for $599 and $699, but Apple did not respond to inquiries as to whether it had the same idea in mind. Now AppleInsider is reporting that the company has indeed rolled out the similar no-contact offer at its stores, which makes sense, given the tight partnership between the two companies.

It's still a little difficult to get a sense of how many people would jump on such an offer. Such offers are very common in other parts of the world, but mobile-phone shoppers in this economic climate might prefer to take their savings up front, especially since all iPhone 3Gs sold in this manner will still be locked to AT&T's network.

The moves, however, are probably just another signpost on the road to the next iPhone. Another AppleInsider report on Friday that AT&T has started offering the $199/$299 subsidized prices to existing customers without iPhones who have yet to become eligible for upgrade pricing seems a strong sign that the carrier wants to clear inventory ahead of a new model.

Last year, Apple and AT&T ran their iPhone inventory down to essentially zero ahead of the launch of the iPhone 3G. They might do something similar this year, because if the plan is to announce a new iPhone at the Worldwide Developers Conference in early June and ship it later (perhaps timed with the "summer" launch of the iPhone 3.0 software), demand for the iPhone 3G would fall off a cliff after the announcement.