New iPhone Says No to Prepaid

With the dramatic price cut in the new iPhone 3G, Apple has decided to cave on a key requirement: Apple will no longer require carriers to offer a prepaid version.

And, the first to suffer from this is American customers. As of iPhone 3G, AT&T has tentatively confirmed to PhoneNews.com that the 3G iPhone will not be available on GoPhone service.

The price cut, from $399 to $199, reflects a $200 subsidy on the part of the carrier. Because that price is taken into account in the retail cost of iPhone, there is no way for AT&T to deduct the subsidy when activating iPhone on a prepaid account.

Some may see this as a darkly positive move. As we’ve previously reported in several articles, iPhone customers on AT&T’s GoPhone service have encountered numerous outages, and difficulty upgrading.

This will, however, significantly dent the wallets of those that wish to use iPhone 3G as a primarily data device. We have previously covered techniques to “cash out” or be refunded unused airtime minutes on GoPhone service.

The official statement from Apple and AT&T, jointly, is: “(iPhone 3G) Requires new 2-year AT&T rate plan, sold separately.”

However, other carriers in Europe have in-place tentative plans to offer prepaid options with iPhone 3G. Clearly, Apple is giving more control to carriers in how they sell and promote iPhone, more in-line with their existing business models.

Christopher Price is the Founding Editor of PhoneNews.com. Today, he leads the team building iConsole.tv - a new kind of Android™ device. He still likes to pontificate... a lot. You can visit his personal blog at ChristopherPrice.net.

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3 responses to “New iPhone Says No to Prepaid”

  1. AT&T 3G Plans: No Revenue Share, No GoPhone, Costs More ?! | The iPhone Blog

    [...] it looks like AT&T will discontinue their pre-paid, GoPhone option meaning there is no alternative than being tied into a 2 year voice+3G data contract under [...]

  2. David

    Well from a consumer and business stand point that sucks! I had Iphone when it first came out under a prepaid plan. Someone stole my phone and although I loved it I did not want to pay another $400.00 for one! Not being tied to a plan is the best because it gives a lot of freedom. As a reviewer of video game products, the new Iphone 3g is exactly what I need! Going to E For All this year, the new Iphone would allow me to send new pictures,info and blogs to all of my readers/viewers which reaches all over the world! Although Wifi only I may now just have to consider a Ipod Touch since I can do the same things it seems

    Apple and ATT needs to rethink this. Or Apple needs to let other carriers carry the phone like the are in the over seas market!

  3. Jason

    I agree with David — non-contracts are better. I’ve had my iPhone for nearly 2 years, and have used both GoPhone and Pay as You Go plans (kept my phone no., too). I don’t have a particular need for a 3G or 3GS other than the fact that my 1st gen iPhone is starting to act up some. There are no original iPhones available any more, so I’d need to get a 3G or 3GS, and commit to two years of service that, even if I decided to move to something else, I’d still have to pay for. C’mon Apple & AT&T. It’s not like you CAN’T do this. You WON’T, and with so many great smartphones coming out (not to mention stronger carriers out there) you’re driving those customers away that like to do things their way.

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