AT&T has confirmed plans to sell the iPhone in the US without a two-year mandatory contract. But the deal comes at a hefty price.
The company will sell the iPhones from 26 March for $599 and $699 (£412 and £480) for the 8GB and 16GB versions, compared to the cost with contract of $199 and $299 (£137 and £205).
The phones will still be locked to the AT&T service, and buyers will still have to use the iPhone price plan, a company representative told Associated Press.
However, commentators have already pointed out that the steep mark-up could lead to some buyers playing AT&T's system. Customers could buy the iPhone under contract, pay a $175 (£120) fee to cancel the contract and then unlock the iPhone or just use it with Wi-Fi to save money.
The $400 (£275) price premium may have more to do with shifting stock before the current iPhone model becomes outdated. The demonstration by Apple of its new iPhone 3.0 operating system makes it likely that a new handset will arrive in the summer.
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