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AT&T To Offer iPhone 3G With No Contract

Those without a contract will have to pay a premium, though, as the 8-GB model will cost $599 and the 16-GB version will be $699.

Starting March 26, AT&T will offer the popular iPhone 3G without a contract and with no activation fee, according to the Boy Genius Report.

But not having a contract will come with a price, as the 8-GB model is expected to cost $599, and the 16-GB version will be $699. The report said the no-contract option will only be available for existing AT&T customers; AT&T hasn't responded for comment as of press time. Before the iPhone 3G's launch, the mobile operator did announce there would be a no-contract option, but it didn't specify a timeframe.

It is unclear if the no-contract option will become popular, especially if it's restricted to existing AT&T customers. Although the second version of the iPhone added GPS and 3G connectivity, many industry watchers attribute its retail success to the starting price of $199 with a contract. Additionally, there aren't many carrier options for U.S. users to take the iPhone 3G. While users will be able to get voice and EDGE service on T-Mobile, the iPhone 3G can only get 3G on AT&T's network.

While the price of a no-contract iPhone 3G may seem high, the original iPhone sold well at its $499 and $599 price points with a contract. Additionally, the price is somewhat in line with the cost of other high-end, nonsubsidized smartphones. Nokia's N96 retails for about $700, and Sony Ericsson's Xperia X1 came out costing $799.

The iPhone may be your next full-function computer. InformationWeek has published an independent analysis of this topic. Download the report here (registration required).

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