Buying an iPhone 3G online and non-activation penalties

Buying an iPhone 3G online and non-activation penalties

Ben Wilson
2 min read

Monday we reported that all new iPhones would have to be purchased and activated either at AT&T or Apple retail locations, eschewing the current iTunes activation strategy pioneered for the first generation iPhone that allowed customers to buy online.

However, in a recent interview with Reuters, AT&T representatives implied that this might not be the case. Quoting the story: "There would be penalties for users who do not activate the iPhone in the first 30 days, AT&T said, in a move aimed at reducing the number of customers who buy an iPhone and tweak it so that they can use it on another network." Additionally, Apple's own UK press release confirms that, at least in the UK, would-be iPhone customers can indeed buy online. From the release: "iPhone 3G will be available in the UK through O2 and Carphone Warehouse. iPhone 3G will also be sold online through O2 and Carphone Warehouse."

First-generation iPhone customers were not permitted to use either cash or gift certificates to purchase iPhones, and were limited to 5 phones per individual buyer. Apple employed this strategy in an effort to hobble grey marketeers seeking to unlock and resell iPhones to consumers intent on using an alternate cellular service provider in an official market or bring iPhones into markets where Apple had no official presence at all.

Typically, the acquisition of a subsidized cell phone involves a contract which, if breached prior to the agreed upon timeframe, results in steep charges to the customer should they wish to keep the phone. In the case of buying an no-activated-but-still-subsidized iPhone over the Web, AT&T and Apple could simply include a checkbox during the order process indicating that the customer agrees to purchase one of the contracts offered by AT&T within 30 days (for example) then impose a financial penalty upon non-activation, or have their credit card charged a predetermined amount to cover the subsidy. Vodafone has offered a glimpse into what that amount might be by stating that they'll be selling unsubsidized 8GB and 16GB iPhone 3G models for 499 and 599 euros, purportedly for prepaid plans.