Friday, March 20, 2009

Would You Buy A $600 'No Commitment' iPhone?

According to recent reports by the Associated Press and popular cell phone blogging site The Boy Genius Report AT&T has announced plans to start selling iPhones without requiring a two-year contract.

Beginning on March 26th AT&T will offer no-commitment purchases of 8GB and 16GB iPhones for $599 and $699, respectively. Currently those same models cost $199 or $299 with the typically 2 yr AT&T contract. So it begs to question who exactly would want to buy an iPhone for $600?

Now it should be noted, the "no-commit" phones are still locked to AT&T, thats right you don't get an unlocked phone. You must also be an existing AT&T wireless customer and you are still required to have a qualify iPhone plan to activate the phone. So again I'm wondering who would actually jump in on this deal.

PC World's Dave Coursey makes an interesting point:

Let's say you buy an 8GB iPhone at the subsidized price of $199 with the required two-year service plan. If you cancel service on day 31 of the contract, the early termination fee is "up to $175" according to AT&T's Web site.
The $199 phone plus $175 for early termination adds up to $374, which is $225 less than the $599 "a la carte" price for the same iPhone.

It would appear to me as though AT&T might be trying to slip something by consumers with this deal. Personally I think they are hoping people won't catch the fact that they still have to use the AT&T service, or get the phone unlocked. The only gain then would be for people that can't currently receive upgrade pricing.

It might be possible that AT&T will offer some other incentives, such as a lower priced calling plan, or cheaper data plan. If that were the case then the overall costs associated with the deal might come more inline. But that doesn't seem likely and doesn't sound like something the company would offer.

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