Apple Confirms: No Online iPhone 3G Sales, In-Store Activation Only

Reader Steve has been chatting with Apple.com CSRs today - he’s already talked to two - and they’ve both confirmed my worst fears: you will not be able to order the IP3G online and it will only be available in stores and it will be activated in-store, provided you wish to purchase it at contract prices (i.e. $199).

What does this mean? It means getting an unlocked iPhone will be incrementally harder and considerably more expensive. Even if you pay for the phone and cancel your contract for a $175 fee, the phone will cost around $500, all told. While this is good news for Apple and AT&T - the unlocking imperative just got quite expensive - it’s bad news for folks who haven’t yet gotten iPhones in their respective countries and/or T-Mobile fans who don’t want to switch to AT&T.

The transcript follows, CSR replies in bold.

Hi, my name is Chris. Welcome to Apple!
Good morning.
Welcome back!

Good morning. I have a question about the iPhone
and the Activation process

Sure.

Will activation be the same as the previous version? Simply by using iTunes?

As previous agents had mentioned, activation will be done in store.

Original post

Comments

[Math 101:]

$199 (8GB iPhone 3G) + $175 (cancellation fee) + $70 (1st month's payment) = $444

That's $56 short of the $500 quoted in this article.

2008 Jul 03 07:34 AM

[Oh Blah Dee...:]

Math 102

=====================

... plus sales tax (say, 8% as an estimate), $444 x 0.08 = $35.52 means an approximate total of $479.52.

2008 Jul 03 07:44 AM

[kmanm:]

I was planning to buy the new Iphone, unlock it and send it to my friend over sea. I guess I won't be able to do that...

2008 Jul 03 08:52 AM

[Vox Rationalis:]

Honors iPhone Math

You can expect the contract cancellation fee to be higher with iPhone than with any other phone AT&T sells, because the subsidy they're paying is higher than on any other phone they sell - $175 is not a credible number when AT&T is saying that a plan-free iPhone will cost more than one with plan + cancellation fee.

I'm very unhappy about the in-store thing. Forget the iTunes deal - to get the discount, logistically you either have to do a rebate or an immediate activation. I hate rebates.

But here's the rub: the iPhone is the ONLY phone AT&T sells that can't be purchased on their website. I have not seen a logical explanation for this. And I'm not looking forward to waiting in line at an AT&T store.

2008 Jul 03 09:20 AM

[digivision:]

ATT already announced they will sell the phone without the plan , don't remember the pricing but I think it's is like the first Generation iPhone
so for those who want to unlock them , that is certainly a good alternative

2008 Jul 03 09:35 AM

[Dan Poarch:]

Unlocking was to work around the fact that the iPhone wasn't available in other countries, to use it as a wi-fi iPod, and to use it on other carriers. Most of these issues have been resolved, with the exception of using it on another carrier. I see nothing wrong with Apple/ATT making you pay them through the nose to use their device in a manner that they don't intend or support.

Not being able to buy the phone online is definitely a PIA. I doubt there's any primary interest in a halo effect, I think this partially ATT trying to get Apple traffic into their stores, with the other intention being an anti-unlocking maneuver. Hope ATT has hired a whole new retail staff... Because their store attendants are idiots at best.

2008 Jul 03 10:15 AM

[wallawallab...:]

This is fantastic for Apple shareholders. Get folks into the store, yes!

2008 Jul 03 10:24 AM

[Just the fa...:]

So if you have to go to an Apple store to get the phone,,,, ummm, who do they think they are, McDonalds???? There is not an Apple store on every street corner ... my simple math (gas prices times distance, plus hotel costs if you are not within a couple of hours of an apple store) says that will really hurt sales and thus not have as positive an effect on the stock price as it might otherwise have had. There are even entire states that don't have an Apple store. As of a year ago, there were only 140 stores nationwide.

2008 Jul 03 11:30 AM

[Mac Daddy:]

In response to BS Detector's comment as to a valid readon why the iPhone cannot be purchased through AT&T's website, I think the reason is very clear. Apple doesn't want unlocked 3G phones out there so they are more tightly controlling the buy/activation process. You can't buy an iPhone online because, if you were able to, Apple and AT&T would not be able to control what you did with it. With AT&T paying Apple something like a $300 subsidy on every phone, I think the company has the right to make sure that you use AT&T's service so that they can recoup the upfront loss they take in selling the phone at the subsidized price.

2008 Jul 03 12:15 PM

[User 221580:]

I agree with Mac Daddy, apple does not want to unlock the iphone because they also going to lose there share. Second, why do people want to unlock the iphone or they talk about unlocking it with out having any facts or ideas. Verizon, Sprint, alltel, metro pcs, and other companies can not use the iphone because it is a different technology. You only left with t-mobile, t-mobile doesnt have 3g service or towers so you will not get fast Internet connection, not to mention, apple doesn't cover anything if you are with any other carrier(s). Second, the 3g iphone cost around $500 like the website mentioned $199 + tax(cant escape that in America), $36 activation fee+ $175 early termination and att fees plus more headache after cancellation. The only reason the 1ST GEN iphone was working with t-mobile is because both companies had 2g services not it is a different game. Att and apple learned their game so it will be harder to unlock the new iphone. I unlocked my first iphone with t-mobile and it was not 100% functional that I had to sign with att and that time I was able to buy it from apple store with out a contract. If you want my advice save yourself a headache because your paying so much money and just buy it from att.

2008 Jul 03 12:34 PM

[iyah:]

i agree with the previous post, the only other carrier in US that Iphone will work on is tmobile. I've had tmobile before and the reception is crap around my house but that's only my opinion. If it doesn't make a whole lot of difference, why not just go with ATT, their plan is not much different and if you are under contract with tmobile or other carriers, just wait a while or pay the early term fee to get out and you'll only have to pay the 199 to get a great hand held computer.

2008 Jul 03 01:39 PM

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