AT&T announced recently that they would be offering another version of the iPhone, one that comes without a contract. That sounds great, on the surface – but just a bit deeper you discover that the no-contract phone has some very severe side effects. Namely, it hurts your wallet – a lot – as the phone runs $400 more than the same model phone with a contract. The $299 version of the iPhone without contract will become $699, a small fortune.
On top of having a massive price tag, the friendly folks at AT&T have also decided that these $599 or $699 phones should be locked to their network – preventing you from using it on other providers’ networks, which essentially means you're locked into a contract anyway. What exactly is AT&T thinking? $699 for a locked phone that costs Apple only $173 to manufacture? True, AT&T is going to be paying Apple significantly more than that. Even if it was twice the price, though, AT&T is kidding themselves if they think people are going to jump at such atrocious pricing coupled with cumbersome ways to restrict what customers do.