by RYP » Mon Jul 07, 2008 1:33 pm
AT&T's Odd iPhone Offer
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By Eric Benderoff
Chicago Tribune
MacNewsWorld
Part of the ECT News Network
07/06/08 4:00 AM PT
Some of the details surrounding AT&T's iPhone prices make little sense, writes Eric Benderoff. The company will sell a 3G iPhone with no contract for a $400 premium. Unlocked phones aren't uncommon, but that $599 iPhone will only be unlocked from a contract, not from the carrier -- it'll still have to use AT&T. Why not just buy the $199 version and pay the $175 early contract termination fee?
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As someone who is familiar with the coverage that surrounds the iPhone, I was puzzled by Tuesday's announcement from AT&T (NYSE: T) Latest News about AT&T about a new way to buy the gadget.
My first reaction: Something must be missing.
Second reaction: Why would anyone pay more for the iPhone if there's no additional benefit?
No Contract, Still Chained to AT&T
AT&T said it will sell an 8 gigabyte iPhone for US$599 and the 16 GB version for $699. Both are offered contract-free, meaning it sells without the usual two-year service HostMySite.com: Managed Dedicated Linux Hosting + 24x7 Service & Support agreement.
That's a $400 option.
It could be worth the cost if you really dislike AT&T's service and wanted to use the phone on another carrier. However, you can't.
Both the iPhone 3G Latest News about 3G "contract" phones, which go on sale July 11 for $199 and $299, and the contract-free phones will work only on AT&T's network New HP LaserJet P4014n Printer Starting at $699 after $100 instant savings., spokesperson Michael Coe told The Associated Press.
AT&T's early-termination fee is a maximum of $175 and, as of May 25, that fee is reduced by $5 for each month you own the phone. That's a lot less than $400.
Why would you do this? When I asked an AT&T spokesperson, she said it is an option for people who don't want to sign a contract. We agreed someone really must hate contracts to spend more than twice the termination fee for this privilege.
SIM Possibilities?
Perhaps the iPhone has a removable SIM card. That's what an "unlocked" phone offers, meaning you are not tied to any specific wireless carrier. However, the first iPhone was made so the SIM card could not be removed.
With a traditional "unlocked" phone, you pay more for the phone because it is not tied to a specific carrier and, therefore, it is sold without the usual subsidy. Many people, this blogger included, have bought phones this way.
Unless AT&T or Apple (Nasdaq: AAPL) Latest News about Apple is not being entirely forthcoming here, I can't understand why I would pay $400 more if the phone is still locked to AT&T's network.
What am I missing?