AT&T has confirmed it will sell an unlocked version of Apple, Inc.'s iPhone 3G. But the unlocked iPhone will cost $599 to $699, and AT&T's voice and data plan will cost the same. So a two-year contract still might be the best value. The unlocked Apple iPhone 3G will work on AT&T and T-Mobile networks, but not Verizon or Sprint.
After all the controversy about unlocking Apple's iPhones, AT&T has made it moot by agreeing to sell iPhone 3Gs without a two-year contract. The company confirmed an Associated Press report that it will begin selling unlocked iPhones next Thursday for $599 and $699, depending on memory configuration.
Consumers can still purchase iPhone 3Gs for $199 and $299 with the two-year contract, or purchase a refurbished model for $149 from AT&T or Best Buy.
An unlocked iPhone has been on AT&T's agenda since at least July. When Apple released the iPhone 3G last summer, the wireless carrier said it would sell a contract-free iPhone in the U.S., but didn't give a date. The unlocked iPhone can be used on T-Mobile or AT&T networks, but it's not compatible with Verizon or Sprint networks.
A Stampede Is Unlikely
AT&T's announcement brings the iPhone into line with standard procedures for every other phone on the market, according to Avi Greengart, a wireless analyst at Current Analysis. AT&T has always been willing to sell the phones it offers unlocked without a contract if consumers ask and are willing to pay for it, he said, but the iPhone has been an exception.
"One of the reasons AT&T hadn't sold the iPhone unlocked is because there was a kickback to Apple for service revenues," Greengart said. "The ability to get an unlocked phone is less of a threat to Apple's goal of getting carrier distribution in multiple markets with the second-generation iPhone. Consumers can buy iPhones from local carriers in Europe and parts of Asia."
Despite the availability of an unlocked iPhone, analysts don't expect a rush on AT&T. That's because, for most people, there's no need for an unlocked iPhone. For consumers who intend to use the iPhone in the U.S., it makes better financial sense to allow AT&T to subsidize the purchase and save $400 with the two-year contract, Greengart said. The cost of the voice and data plan are the same regardless of the price of the phone.
Unsanctioned Applications
But for some consumers an unlocked iPhone is welcome news. For travelers who commute between Europe and the U.S., an unlocked phone makes the wireless experience more seamless between networks. Members of the military who move around frequently and don't want to sign a two-year contract might also find investing in an unlocked iPhone a smart idea.
Unlocked iPhones may also be attractive to people who want to install applications on the iPhone that Apple has not sanctioned. Renegade stores are launching to sell unauthorized applications for the iPhone and iPod touch. The Cydia Store is selling applications not available on Apple's sanctioned store, and another company plans to sell adult games for the iPhone.
Until now, consumers had to jailbreak their iPhones -- modify them so they can install and use unauthorized apps. A third party called Rock Your Phone helps users who haven't modified their iPhones.
Analysts caution, however, that manually unlocking the iPhone voids the warranty.
source
Related Stories
Mobile 3D gaming revolution leaving Wintel behind
