Prospects for unlocked iPhones rise with AT&T promising contract-free option

The iPhone unlocking game has changed again.

Though neither Apple nor AT&T had hinted at an unsubsidized option for the iPhone 3G, today AT&T issued a press release that states it will sell iPhones without a contract.


The relevant sentence: "In the future, AT&T will offer a no-contract-required option for $599 (8GB) or $699 (16GB)."

The subsidized prices are $199 and $299, which puts the premium for a contract-free phone at $400. The only catch appears to be the timing. You won't be able to buy an unsubsidized iPhone on July 11 when the new version goes on sale, but at some unspecified point in the future.


Still, the arrival of a contract-free iPhone 3G will make life much easier for the folks who wish to unlock their iPhone for use with a carrier other than AT&T.

When Apple announced the iPhone 3G at the Worldwide Developers Conference June 9, the picture for unlocked iPhones looked bleak.

Customers would be required to sign a two-year contract with AT&T and activate the phone at the time of purchase. No online sales, no way to fudge it. You buy an iPhone, you buy a contract.

Breaking the contract would not be impossible, but inconvenient enough that doing it just to have an unlocked iPhone would have proven impractical for many.

Although the unsubsidized 3G iPhone also will be locked to AT&T's network, unlocking it will be a trivial matter -- as we saw last year with the first version. I expect unlocked 3G iPhones to surface within days -- if not hours -- after it goes on sale July 11.

I applaud this decision. Everybody benefits. Apple and AT&T still make money while customers who desire more flexibility in the use of their iPhone get what they want. The $400 premium is a bit steep but probably worth avoiding the hassle of AT&T's draconian rules for canceling a contract.

It would be even better if the unsubsidized iPhone came unlocked, but I suppose Apple and AT&T need to at least make it appear they disapprove of the inevitable rampant unlocking that will ensue.

AT&T also expects to offer a prepaid plan to accompany the sale of the unsubsidized iPhones, but offered no details on that today. Such a plan might appeal to customers wary of the cost of any of AT&T's pricey contract plans, which start at $70 a month.


AT&T's "Get iReady" customer information page can be found here.