iPhone 3G must be activated in-store (and other followup questions answered)

Yesterday we went over a few of the more confusing bits of the iPhone 3G launch -- and let's be honest, the details of this launch are confusing as hell compared to the original go-round. Of course, there were a lot of burning questions to be answered from the audience, so we got an AT&T spokesperson to weigh in on what's on your mind. The most surprising answer? Contrary to reports implying otherwise, AT&T pretty much categorically claims that no matter where you buy your iPhone 3G, be it from AT&T or Apple, you have to walk out of the store an activated customer. That means no in-home activation, and definitely no buying an iPhone for your friends or family. Check it out below, more questions after the break.

Chris asks: Can these devices be purchased and given as gifts?

No. You will need to walk out of the AT&T or Apple store with the device activated.

Greekjgg asks: What if I want to buy one for work which already uses AT&T for company account? I can't activate in store, obviously, so will it be possible to to buy without a contract?

We don't have details yet but iPhones for business use will likely be provisioned through your company's IT department.

Tons of people ask: If I purchase an original iPhone from a friend will I be able to get the old data plan pricing? Or will I need to sign up at the new, more expensive rate?

Yes. You can get the old data plan price if someone gives you a device and you establish service for yourself.

Chris and SeditioN VII ask: What's the no-commitment price?

We have not yet announced the unsubsidized price.

We follow up: So you WILL be able to buy it without the two year commitment?

We haven't announced whether or not that will be offered.

Vic asks: Will long-time customers who are otherwise eligible for a free or reduced-price handset upgrades be able to lower the price when buying the iPhone 3G?

No one will pay less than $199 for the 8GB or $299 for the 16GB models. As you know, those are subsidized prices.

Matt asks: Say I just recently signed up with AT&T, standard contract. Now I want to get an iPhone 3G -- will I have to pay more than $199 for the phone because it's subsidized? For example, if I were to upgrade to a Blackberry now, I can't get the advertised $99 price (because I am a new, existing subscriber); my price is $374.

It depends on whether or not you are eligible for an upgrade.

We ask: What is the penalty for not activating the phone in 30 days? How will that be enforced?

[no comment given]

[Engadgetluvsappl @ Jun 13th 2008 12:28PM]

*sigh*

[d @ Jun 13th 2008 12:46PM]

There's a reason why Apple wanted the different model originally - it was simple and NOT designed to screw the customer! One simple price, simple activation and set up, wether you were new or an old AT&T customer, you could get the phone with 2-yr. contract for the same price. I think that's still how it'll work though, contract extension = 199 iPhone, but the iPhone 1 business plan was still much more... Apple.

[Dave @ Jun 13th 2008 1:02PM]

To whomever said it in the last 3G iPhone post yesterday, you were so right about this being the "fluff" stage of the marketing of this device.

[James Cameron @ Jun 13th 2008 1:05PM]

Didn't know engadget turning into AT&T support center.

[moa @ Jun 13th 2008 1:14PM]

Apparently you can pre-order unlocked, no contract iPhones 3G already, for a price of ~340$ per 8GB model:

http://cgi.ebay.co.uk/Apple-3G-iPhone-just-only-159-Pre-order-now_W0QQitemZ260250283244QQihZ016QQcategoryZ152987QQssPageNameZWDVWQQrdZ1QQcmdZViewItem

[MatthewJ @ Jun 13th 2008 1:17PM]

I had no idea that US phone networks raped Americans as much as this.

With such high subsidised prices (compare that with the potential for FREE subsidised phones and iPhones in UK) and long contracts (most UK ones have been 12 months for a long time, 18 months is becoming more widespread now) its no wonder that mobile phones haven't been as popular as they are in Europe.

I guess this explained the popularity of the original iPhone!

[Dave @ Jun 13th 2008 1:28PM]

MatthewJ, not that I ever enjoy defending AT&T, but think about the land mass of the UK, and then think about the land mass of the USA. Then consider that all of these plans have nationwide roaming. Now think about why they charge more here.

[Engadgetluvsappl @ Jun 13th 2008 1:35PM]

How do ANY of your replies relate to my original comment?

Get in line, fools.

[John @ Jun 13th 2008 1:37PM]

I encourage ALL haters of Engadget's Applephilia to STOP CLICKING on Apple-related posts. Why? Because every time you do, you're supporting Engadget by allowing them to show you more ads and therefore rake in the money while you vent your frustration, which ultimately gets responded to by 500 Apple lovers that feed on anti-fanboy comments. In turn, that provides the big E with even more money. If you don't want to see so many Apple posts, then by God stop enforcing the behavior with your time and by giving them revenue!

[MBN @ Jun 13th 2008 1:49PM]

Engadgetluvsappl, or perhaps ALL of these replies relate to your original comment, since it was meaningless. What the hell is "sigh" supposed to mean without context, fool?

[MatthewJ @ Jun 13th 2008 1:53PM]

@Dave:
Yeah, I understand the logistics of their argument, however, most of the European carriers are now owned by the same 4-5 companies, and Europe as a continent is comparable in landmass to the US, so its not really a reasonable excuse in my opinion.

Also, it should be counterbalanced by the fact that there are more people in the US, which means theres still the same amount of customers per unit of area.

[Engadgetluvsappl @ Jun 13th 2008 1:54PM]

Read the damned name, fool.

[ill trooper @ Jun 13th 2008 2:23PM]

Do the replies relate to "*sigh*"?

Who cares?

Not liking the 'reply' heat? Stay out of the kitchen. It's not that big of a deal, plenty of room on the internets for all these opinions!

[Sean @ Jun 13th 2008 2:26PM]

@ John:

You said "[...] that provides the big E with even more money"

What you meant to say "little e"
There's no big E in engadget!

[Mr. S. @ Jun 13th 2008 2:41PM]

It really pisses me off that I can't walk into a Apple store, purchace a new iPhone 3G to gain the GPS abilities which is all i want, and just move my service over to it. I dont want 3G data, and I dont want to pay an addition $10 for 3G and who knows what for Text messaging. I like my service the way it is, and i'm willing to spend $400 for a the same phone with GPS and a little more space. I dont get it.

[loosely_coupled @ Jun 13th 2008 4:13PM]

Matthew J:

Yes, you are correct. The American mobile market is much less competitive in regards to Subsidized handsets. Apparently In the UK and other parts of Europe, you can easily get a 8GB N95 or pretty much any other high-end phone (even those costing $700-$900) COMPLETELY FREE on contracts. Also, carriers in the USA do not provide a staggered level of subsidy depending on how much your monthly plan/tariff is. They do give you a better subsidy if you sign up for a 2-year contract versus a 1-year contract.

Overall you'll usually never see a subsidy in excess of $300, and the average would be $100-$200 off the retail price. If I want to buy a new HTC, Samsung, or Blackberry Smartphone, I would pay somewhere around $300 depending on the retail price of the device.

[Shahryar @ Jun 13th 2008 4:17PM]

@Mr. S, if you only want GPS on top of the current iPhone's functionality, aren't their better options out there besides the iPhone? I'm with you on not wanting to go with AT&T. I love T-mobile and plan to be with them indefinitely. If the upcoming iPhone was compatible with T-mobile's upcoming 3G band, I'd consider figuring out a way to get it for T-mobile. But since it doesn't, I'll look for something else to replace my current N76 (would prefer something Symbian and similar to my wife's N82, but w/ T-mobile compatible 3G Bands).

[deadock32 @ Jun 13th 2008 5:45PM]

You can totally buy an Iphone without a contract... just get the Iphone3G and then end you 2 year contract and pay the early termination fee. SIMPLE

[Twitchy @ Jun 13th 2008 8:28PM]

Q:"We ask: What is the penalty for not activating the phone in 30 days? How will that be enforced?"

A: Ninjas.

[Rich @ Jun 14th 2008 10:18AM]

"Apparently In the UK and other parts of Europe, you can easily get a 8GB N95 or pretty much any other high-end phone (even those costing $700-$900) COMPLETELY FREE on contracts."

That's correct. A Nokia N95 8GB doesn't cost a dime on a $60 (inc. tax) per month plan in the UK.

[Matt Vanandel @ Jun 16th 2008 1:22PM]

*sigh*? There's one fantastic piece of information there - and that is that AT&T is ::considering:: offering an unsubsidized, contract-free version of the phone. I, for one, would consider that an excellent deal (although with an ETF of $175, you might as well sign the contact and just cancel whenever you get disgruntled enoygh - since it becomes a question is whether you pay the money now or, potentially, later).

[Alex @ Jun 13th 2008 12:31PM]

I want to purchase 4 phones for a family plan. Will you have an in-store limit? If so, how can I still get 4 phones? Two parents, two kids.

[SeditioN VII @ Jun 13th 2008 12:43PM]

Right now the instore limit is going to be three per customer, however that may change to only one per customer on launch date.

[Flashpoint @ Jun 13th 2008 12:44PM]

They've enacted a limit on phones and activation to stop people from buying a buunch of em - unlocking em and then selling em on Ebay.

I'm gonna wait till unlocked 3G iphones hit ebay and then buy one.

No way in hell I'm playing by their rules.

[ByronGman @ Jun 13th 2008 12:55PM]

@ Alex

If the limit is three per customer then between you and your wife you guys could buy 6 phones (2 people x 3 phone per person = 6 phones).

[phoomp @ Jun 13th 2008 3:09PM]

With in-store activation, the reason for purchase limits (reselling on eBay) goes away. It'll be interesting if AT&T sees it that way.

[Steven @ Jun 13th 2008 3:00PM]

Unless your kids are paying you for the phones,

you're the problem with america.

[Jiggs @ Jun 13th 2008 3:19PM]

Do you all have Bimmers too?

[CraigJ @ Jun 13th 2008 3:31PM]

nah, just a couple of Porsches

[Mobile Phone Diva @ Jun 13th 2008 5:13PM]

Why did Alex get low-ranked for asking a simple question?

I think if the family went in together, perhaps they'd allow 4 since you can show who will be using the phones. It can't hurt to ask.

[paperless @ Jun 14th 2008 4:06AM]

Steven i don't live in America or anything but i think the problem of ANY country is people who don't god damn mind their own business.

[John @ Jun 14th 2008 8:09AM]

applause for paperless!

[Alex @ Jun 14th 2008 10:14AM]

Our whole family works hard.

Therefore, we play hard.

Paperless, thanks for the comment...but it's ok, they can be jealous.

We love cars and we do own a BMW. Why? Because it's a nice car and it's fun to drive. Frankly, that should not be discussed as I was simply asking about the iPhone.

[rob paek @ Jun 14th 2008 10:42AM]

dang you are a nice dad!

[Mikeweezer @ Jun 14th 2008 2:23PM]

are you adopting?

[peekinde @ Jun 13th 2008 12:31PM]

So I just bought a 3g iPhone and it gets run over by a truck, can I get another one under the same contract for the same price?

[d @ Jun 13th 2008 12:41PM]

Now I don't work for AT&T or Apple, nor do I have an iPhone (though I hope that changes!), but my guess is that you can replace it through Apple if you get Apple Care with it.

[SeditioN VII @ Jun 13th 2008 12:45PM]

Thats incorrect. Apple care is simply an extended manufactures warranty, nothing more. You will be able to purchase another one and resign another two year contract, but you wont get it for 199 again. It will be more, but that number has yet to be decided on.

[Ross @ Jun 13th 2008 1:23PM]

If you purchase the accidental insurance coverage through Asurion (I think) then you pay $5/mo on top of your bill and a $50 deductible for a new phone. I may have fudged the numbers a bit, but it's somewhere around there and AT&T offers it as an option. I'm sure it'll apply to the iPhone too.

If there's anyone that has experience with the current-gen iPhone and the insurance plan, feel free to chime in. I don't imagine this iteration will be any different.

[Brad @ Jun 13th 2008 1:39PM]

Asurian typically charges $7/mo for "premium" phones. I wouldn't be surprised if it was $10 for the iPhone, just 'cuz they can.

[Joe @ Jun 13th 2008 1:45PM]

Actually, the insurance AT&T offers covers every phone BUT the iPhone.It's a $50 deductible for mid to lower end phones and $150 for high end phones.

[Brad @ Jun 13th 2008 1:49PM]

Asurian typically charges $7/mo for "premium" phones. I wouldn't be surprised if it was $10 for the iPhone, just 'cuz they can. Every other bit of iPhone pricing has been "special"

[Tom B @ Jun 13th 2008 2:05PM]

If this actually happened to you, you'd be screwed and have to pay the unsubsidized price for your replacement. This is the way it works for every other phone. If you get a Blackberry for a $99 subsidized price but you happen to smash it up on the way home, you will have to pay through the nose for your replacement. It's possible AT&T could surprise me and be compassionate of your situation, but I highly doubt they would eat an additional $200 just because you were unlucky and busted the phone.

Unfortunately these other comments are also correct in that AT&T doesn't offer insurance on the iPhone for some reason... maybe there are other 3rd party companies that offer a cell phone insurance plan separate from AT&T you'd like to take a chance on? I wouldn't recommend it though... Insurance companies are almost as shifty as cellphone companies...

[MadCow234 @ Jun 13th 2008 2:16PM]

@ Ross...

On Tuesday I called AT&T and talked to a customer service manager from dialing 611 on my iPhone to figure out about my upgrade options. The rep explained to me that the $100 discount I will receive for upgrading will not be available for the 3G iPhone. She stated the $199 and $299 price points no matter what. After this unfortunate news, I asked her about insurace because my HTC 8525 was stolen last December when there was no insurance option for smartphones at that time. She told me that the $5/month insurance is now available for every phone offered by AT&T EXCEPT the iPhones. According to her, Asurion and Apple have not even talked about insuring the iPhone yet. I also asked her about insuring my current-gen iPhone and she said no dice. Granted, I've gotten incorrect information from AT&T reps about everytime I talk to one, but the two women I talked to on Tuesday had both worked at AT&T since before they were AT&T before they were Cingular before they became AT&T again, lol. But still, take this with a grain of salt, but apparently no upgrading and no insurance for the 3G iPhone.

[mattq @ Jun 13th 2008 2:24PM]

I dont own an iphone, but was in an apple store getting my MBP looked at, when a guy walked in with a smashed iphone, he had ran it over with his work truck. I did not see this resolved, but knew applecare didnt cover accidental damage, and after a little research found out that you cannot buy the accidental coverage for the iphone through att. We'll just have to see for the the 3G

[Pepsipoint @ Jun 14th 2008 3:55AM]

I've had cingular and atnt for around five years now, and believe me most of the reps don't know what's going on. You could call five times in a row, ask the same question and get five different answers. We were misquoted about insurance three times, and then had to fight them to fix it. When it comes to customer service I rate them a 2 out of 10.

[Zeyza @ Jun 13th 2008 12:32PM]

wow...

[ChillyWilly @ Jun 13th 2008 2:43PM]

Wow is right. Are we purchasing a second residence or a smartphone?

I know they will sell a lot, but this confusion mess is just going to push the jailbreakers into finding a way around this. Because it's obvious this is why they set it all up like this. Cat and mouse game all over again.

[Rob @ Jun 13th 2008 12:32PM]

Epic fail. When the 3G sells about 50% the units of the 1st model, link back to this post.

[Zak @ Jun 13th 2008 12:35PM]

I think you're grossly underestimating the effect a 50% price drop will have. This thing will sell well over 10 million this year.