No Contract, No iPhone for you

55 Comments

Update: Readers, I checked with Walt Mossberg about the SIM card situation, and the mistake is entirely mine in misreading his report.

I never said there wasn’t a SIM slot or that the iPhone couldn’t physically accept SIM cards, even those from non-AT&T carriers. That means the cards won’t work, that they are useless when inserted in the phone, not that they can’t be inserted in the phone.

That said, I still won’t be buying an Apple iPhone, unless I can use my current AT&T SIM Card, and don’t have to sign-up for a draconian two-year-contract. Boy Genius has left a comment saying that it is possible to get the phone without a contract, except the phone company said otherwise. He says that “The iPhone will in fact be available without a contract — only if you fail their credit check.” In other words, if you are like me – with a decent credit, then you are out of luck.

The reason: the phone is not available to those who don’t want to sign up for a two-year-contract with the AT&T service. No No, I am not talking about pre-paid people, who don’t even have a prayer of a chance to get the iPhone. [digg=http://digg.com/apple/No_Contract_No_iPhone_for_you]

If you are an existing AT&T customer – and I am – but have gotten out from under their thumb (aka) contract, Apple’s phone isn’t available to you. Oh, I checked with the AT&T officials and they said that it is true: no contract, no phone. And since it doesn’t have a SIM card, there is no chance of getting one from the gray market.

It only works with AT&T (formerly Cingular), won’t come in models that use Verizon or Sprint and can’t use the digital cards (called SIM cards) that would allow it to run on T-Mobile’s network. (Walt Mossberg’s Review)

It is actually pretty annoying that one-has-to-jump-through so many hoops, and it is almost not worth it. AT&T gets a lot of money with AT&T Wireless. I have been a customer for nearly a decade and to be forced into a contract, that just blows. Ditto for Apple!

Will my dollars are staying where they should stay: in the savings account. Hey maybe someone needs to set up a social network for those who are not buying iPhone!

55 Comments

Maciek

Check out the comment I posted on my blog about iPhone’s price and early termination fee.

Maciek

Zoobos

I guess for the first time, having a terrible credit might not be so bad. Go figure…

Boy Genius

You are correct in your assumption that a 2-year agreement is required. It is. The only difference is if you do not have good credit, and fail the credit check, you will be offered a postpaid option with no contract. You will still be required to select an iPhone voice and data plan. At the end of the day, they would rather sell an extra device and service plan, even if someone has bad credit history. You are correct in regards to you being out of contract though. If you want to buy an iPhone you must agree to a new 2-year agreement. If you were 23 months in though, you could purchase the device and simply add an iPhone data plan, keeping your existing voice plan.

Om Malik

Boy Genius,

“The iPhone will in fact be available without a contract — only if you fail their credit check.”

Are you saying that people with good credit and non-contract customers can’t get the iPhone. because that’s what it seems.

Alok

Om, I am 100% with you on this.

It will be a shame if we can’t just buy the phone, put our existing cingular/at&t sim (with data plan) in it and get it going. 7 years ago, I joined cingular on a 1 year contract with a very basic phone. Since then, I have always bought unlocked GSM phones and just put the sim card in them.

I had always thought that $500/$600 is the price of the no-contract phone but I was wrong. I am very happy with my SE P910 (yups, it plays music too) and will be staying away this phone till it is free of any/all kind of contracts

Phil H

Om – aha! thanks for the clarification. i’d hate to think that someone with a free-and-clear account was out of luck…

Om Malik

from what i gathered from T people, there are no contract free options for now, and if there are in the future, that’s a whole different story.

Om Malik

Even if it is available unlocked, there is no sim card, which means you are stuck with that device – or in the apple ecosystem – if you sign up. basically right now i change phones as often as i change my shirts, which is not feasible if i give up the number to apple phone.

Jeff

Even if it could be SIM-unlocked, didn’t we hear that it needs a server at the operator to work anyway? So my understanding is that you couldn’t get it to function properly in any event without the server.

Eric Frenchman

Why are you surprised that AT&T would dump on a current or former customer? Come on. That’s their MO. This is an acquisition play for them. Trust me, Apple will win big because it is a new market for them, while AT&T will be stuck with a bunch of pissed off current customers as well as network issues. You watch.

Eric

Boy Genius

Thanks for the link. The iPhone will in fact be available without a contract — only if you fail their credit check. Then, and only then, will a Go Phone option pop up. It is not Pay As You Go, rather a credit or debit card must be put on file and you will be billed monthly, but you will not have a contract. The iPhone most certainly has a SIM Card tray, and you can even slip a another existing AT&T SIM Card in, after you have activated the device through iTunes. What Walt, and everyone else is referring to, is that the device is locked to AT&T only. You can’t put another carrier’s SIM in the iPhone, but other AT&T SIMs will work just fine.

tg

Is there anything more evil than cable and phone companies in this world?

Brian

Uncle Walt is incorrect about the SIM card. Several sources including David Pogue have confirmed the iPhone uses a regular GSM SIM card.

Phil

@Leigh: The phone is likely to be SIM locked to AT&T anyhow. Therefore another network’s SIM card will almost certainly not work.

Om Malik

bloat,

expansys.us and you can buy any cool phone or myworldphone.com or even gsmphones.com

they are all over the web. paying for the phone – that was not even the issue for me. i would have gladly paid $700 for it or whatever.

bloat

I don’t get it– where can you possibly by a new, cool phone in the USA without signing a contract, or paying through the nose?

Yuvamani

Buy the OS iPod which will ship later this year (according to the internal steveNote) At least you will get some of your iPod fix.

Mike D.

It is actually pretty annoying that one-has-to-jump-through so many hoops, and it is almost not worth it.

“Almost” being the operative word there. :)

Om Malik

hey phil,

i mean “from under the thumb” means i can switch the day i get pissed with their service.

sorry for not being clear.

Libran Lover

Lack of simcard would be a serious drawback. I suspect that there is IM client because AT&T plans on making money through SMS. What is the bet that even if an IM client were introduced on the iPhone later, it will use the SMS messages instead of the data connection? The same thing goes for not being able to use MP3 as ringtones.

jeremy

did apple really produce enough for people to buy two? or do they just want to see them on ebay? if they produced that many, the hype might die pretty quickly. im guessing they want them on the aftermarket.

Phil H

How are you out from under their thumb? I’ve got an AT&T plan, but am outside the subsidy window (e.g. eligible for a subsidy discount on a new device if I wanted to extend the commitment)…
Just not sure I understood what you meant. Sorry if it’s just a case of under-caffeination.

Leigh

Yes it does have a sim card and you can buy it, put it on a contract and pay the early termination fee and then pop a T Mobile SIM card into it.

Erick Erickson

According to Apple’s FAQ today, it does have a removable SIM card.

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