iPhone 3G Requires 2 Year Contract, In Store Activation

AT&TApple and AT&T have learned their lesson. They have a plan on keeping people from unlocking the iPhone: require a 2 year contract and activate the iPhone in the store only. No more activation through iTunes. This means you can’t walk into the Apple Store, buy an iPhone, go home and unlock it to T-Mobile or whoever. You also can’t buy them online from AT&T’s website or Apple.com. This might not matter as much because many countries will be getting the iPhone 3G, but for those that won’t, it’s going to be pretty hard to get one. I assume this will be the same for most carriers throughout the world. One way might be through the few countries who do not allow carriers to lock phones but then the price will surely go up. This memo to AT&T stores explains it all:

AT&T and Apple today announced that the iPhone 3G will be available in the U.S on July 11. iPhone 3G combines three products into one small, lightweight device: a revolutionary mobile phone, a widescreen iPod, and it puts the Internet in your pocket with the best e-mail, web browsing, search and maps applications ever on a mobile phone.

The new version of the iPhone harnesses the power of AT&T’s broad and powerful 3G mobile broadband network, which offers 3G mobile phones download speeds of up to 1.4 Mbps.

Key Device Features:

Operates on Wi-Fi, EDGE, and 3G networks
New enterprise e-mail capability with support for Microsoft Exchange ActiveSync
New iPhone software development kit (SDK) to support new innovative applications
Note: 2G iPhone customers will be able to download the iPhone 2.0 software from iTunes which enables new features such as access to corporate e-mail via Microsoft ActiveSync.

New Activation Process and BRE:
The iPhone 3G will be activated at point of sale when the device is purchased, in store. The BRE period will change from 14 days to 30 days and will require the device to be returned to place of purchase before service is cancelled.

Pricing and Plans
Device Pricing:
$199 8GB and $299 16GB for new activations and qualified upgrades with 2-year agreement.

Data Plans and Pricing:
The iPhone 3G will be activated on existing AT&T voice rate plans, but new data plans have been created for the 3G device.

All iPhone 3G customers are required to have one of the new data plans and qualifying voice plan.
Customers intending to use the iPhone 3G for access to corporate e-mail, business applications, or access to corporate intranet are required to activate with Enterprise Data Plan for iPhone.
The 2G data rate plans will remain available for 2G devices until further notice.
IRU service discounts for both voice and data pans will apply to iPhone 3G, but not 2G iPhone.
CRU service discounts for voice and data will apply to both 2G and 3G, when on a qualifying data plan.
IRUs will not get a discount on device purchase for 2G or iPhone 3Gs.
Data Pricing will be as follows:
Consumer Data Plan (must be added to qualified voice plan):
$30 – Unlimited Data (E-mail/Web), includes Visual Voicemail

Enterprise Data Plan (must be added to qualified voice plan):
$45 – Unlimited Data with personal and corporate e-mail, web, includes Visual Voicemail

Upgrade Eligibility and Qualified Upgrade Pricing
Upgrade eligibility will be determined based on standard upgrade eligibility rules. Customers must be upgrade eligible to receive the qualified upgrade pricing. However, not all customers will be qualified upgrades. AT&T has not determined the price of the 3G device for non-qualified upgrades.

All customers will be required to sign a 2-year agreement. There will not be a “no commitment” price for the iPhone 3G.

Note: When the 3G device launches, all active postpaid customers in good standing with a 2G iPhone will be eligible to receive the qualified upgrade pricing for a 3G device regardless of service tenure. (Customers that would not otherwise be eligible due to tenure will be made eligible at launch).

Activation Process
The new 3G device will be activated in store in both AT&T and Apple stores. Customers must accept AT&T and Apple Ts & Cs, sign a 2-year agreement, and select the data plan for the iPhone 3G before leaving the store. The current iTunes activation process will no longer be required for iPhone 3Gs, however a short tether process to unbrick the 3G device will be performed in all AT&T stores (tether cords will be provided). Apple stores will also perform this tether process, however in the event that a customer’s device is not tethered in the Apple store, their device will be inoperable until they get home and tether through iTunes. Prepaid and Pick Your Plan will not be allowed on the 3G device.

The SSK has been modified to allow customers interested in the iPhone 3G to enter their information, select rate plans and data plans, and print a document that will allow COR reps to quickly access the customer’s information in OPUS and save time for data entry in the activation process.

Note: In the interim, 2G iPhones will continue to be activated via iTunes – BAU. This is also true for existing AT&T customers who receive a 2G device as a gift, hand-me-down, etc. and wish to activate the device. Existing AT&T customers who switch to the 2G iPhone must tether through the iTunes process to begin using the device.

Compensation
Because the 3G device will be activated in store, compensation for the 3G device will be BAU. COR reps will receive compensation for upgrades and new activations with a 2-year agreement.

Purchase Limit
The device purchase limit will remain three (3) per customer for iPhone 3G in AT&T stores.

Allocations
If allocations are required at launch, supply chain will allocate based on January-April sales rates applied on a store-by-store basis.

Direct Fulfillment
The DF tool will be available at launch in COR for iPhone 3Gs. Customers will be required to pay for the device when the order is placed and the phone will be shipped to the store in the customer’s name.

Existing Stock of 2G Devices
We will continue to sell 2G devices until stock is depleted.

Return Policy
2G Devices
Customers who recently purchased a 2G iPhone may want to return their device once they hear about the 3G model and price point, but the new device will not be available immediately. Since the announcement and launch will be about 30 days apart, we could lose some customers who are within their BRE period and want to return their device before their 14 days expires and wait for the new 3G device. We must acknowledge and address their desire to get the best device for them.

Here’s how AT&T will handle 2G iPhone returns:

If a customer purchased before 5/27, we will follow BAU processes – no device returns. However, all postpaid 2G iPhone customers in good standing are upgrade eligible, so these customers will qualify to upgrade to a 3G iPhone when it is available.
If a customer purchased on or after 5/27 (within the 14-day BRE period before the product announcement on 6/9), we will let them exchange their 2G iPhone for an iPhone 3G before August 1. This means that after we launch the 3G model they can return their 2G iPhone, pay the 10% restocking fee, and purchase a new iPhone 3G before August 1.
Note: This modified return policy applies only to customers who purchase from AT&T stores.

3G Devices
The return policy for 3G is changing from 14 days to 30 days for both Apple and AT&T stores.

To cancel service within the first 30 days, the customer must return their equipment to the place of purchase (no exceptions).
If the customer cancels service after 30 days, they will be charged the ETF. The customer is not required to return the device to cancel after 30 days.
Special Notes Regarding 2G Devices

After the iPhone 3G launches, activations of 2G iPhones for new AT&T customers can be performed in COR stores or in the existing iTunes tether process. COR reps will receive compensation for activations of new AT&T customers done in store.
2G upgrades will continue to be activated via the existing iTunes tether process.
Existing 2G data plans will remain available for 2G devices until further notice.
Note: 2G iPhones are out of stock in the DCs, and the Direct Fulfillment tool for 2G is turned off. 2G iPhones have been removed from the “myRewards” incentive catalog.

Merchandising/Marketing

Current 2G iPhones should remain on device fixtures in store. Do not remove 2G demo devices until further notice.
3G demos will be pulled from stock when they arrive following BAU process for display devices.
Video loop content will be pushed to stores when it is available.
New docks and retrofit kits will be provided for existing iPhone fixtures.
The following merchandising elements will be in stores for launch:

Rate brochure and display rate card
22 x 28 poster
Window banner
Duratrans – will be available for markets to order
Coming Soon: Posters and banners are TBD
Training

Device training, including features and functionality, will be available via My CSP by 6/13.
OPUS training will begin no later than 6/20 and will be delivered via the Learning Edge.
Launch preparedness training, including last minute details, will be conducted the week of launch (if needed) via RSM or Centra sessions.
Communications/My CSP
All iPhone-related communications, inclusive of training announcements, will be posted to My CSP. Login and access are via the “Everything iPhone 3G” ad space. Or search on either keyword “iZone” or keyword “iPhone 3G” to locate.

Launch Plans
Support logistics for launch day will mirror last year’s iPhone launch:

Letters will be sent to all landlords under VP/GM signature for advance notice of store hours, crowds expected, possible parking issues, etc.
Security will be provided for locations requesting armed police or unarmed, uniformed guards.
Manager checklists will be provided to support RSMs to set expectations and help them be prepared to complete all required actions.
Documents will be posted on iZone to let RSMs know when to expect delivery of launch support materials.
Job descriptions for key launch day functions will be provided for: Back Office Manager/Inventory Runner, Crowd Manager, Greeter, Product Demonstrator, and Security Support.

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Comments

  1. This is not a good news for people whose countries are not in the list (like me!!) So I will not be able to buy a 3G iPhone although I wish to pay for the plan. Oh man… I’ll stick with my unlocked iPhone anyway…

  2. David Patrick says

    So the big question to me is if you have to goto ATT to activate, then take home when we get a JB or PWN will be able to do it and still keep the activation made at the store, I have a feeling its no then that means no JB or WINPWN, that is my deciding factor if I will buy a 3g IPHONE for sure

    thanks all

  3. RandalRampage says

    Does this mean that I will not simply be able to deactivate my current iPhone and get the 3G, because I already have a 2 year service agreement.

  4. Oh BIG mistake if we cannot jailbreak the phone it is useless for most people thus it will not sell anywhere as good as the first gen. BAD move for apple oh well their stock will so take a hit for this big time………

  5. Ok so if I just signed a two year agreement and bought a phone, I will not be able to purchase the 3G for the $199 price because I am not eligible for an upgrade for another two years? This doesn’t make sense… I just bought a blackberry because I sold my iPhone on ebay because I thought when the 3G comes out it will be a fixed price like the last iPhone

  6. AT&T is forcing customers and Apple is an accomplice. With this, they tells people that AT&T is not good enough to differentiate from other carriers with added value services.

  7. Technically couldn’t you go home and do a restore and start from scratch with the new 3G? I just remember doing a restore and before I installed my backup and did anything, it had the little itunes icon and cable picture like it was brand new out of the box.

  8. iambored8907 says

    Luckily at&t never actually changed my contract last july, so I will definitely be able to upgrade to the 3G. My current contract says it started back in January 2007, and never counted the extension. (BTW I didnt hacktivate it nor do the fake ss) AT&T just never extended it :)

  9. If the customer cancels service after 30 days, they will be charged the ETF. The customer is not required to return the device to cancel after 30 days.

    So you’ll still be able to have your iPhone with no contract, but you’ll have to pay an unknown as yet subsidy.

    • iambored8907 says

      I believe AT&T announced the non-sub price is the original 399 for 8gb

    • ETF = Early Termination Fee.

      It’s likely to be around $200 – maybe.

    • where did you hear that? from WWDC Jobs said the mas price from 8gb anywhere will be 199

    • It’s written in the main post above, it’s all over Gismodo and if you think about it, legally, Apple or AT&T cannot stop you from cancelling your $199 contract, but they can ask you to pay an ETF if you wish to keep your phone. That’s why the price has dropped. In other words if you want an unlocked iPhone you sign the contract and then cancel after 30 days, pay the ETF and the phone is yours.

      http://gizmodo.com/5014909/att-memo-to-retail-managers-shows-iphone-3g-policy
      As I live in the UK it doesn’t affect me. I’m still waiting to find out how much a pay-as-you-go iPhone will cost (Vodafone have announced this but no prices yet). But I reckon 1st gen iPhones are worth hanging onto

  10. Steven Eckelberry says

    Wow, very thorough! You’ll find this on very few sites. Anyway, I’m a little upset about activating in-store. I thought that one of the most innovative things about the iPhone was the activation process. Now, even honest customers like me who don’t mind having an ATT plan get hit.

  11. iPhones don’t count for upgrades at all. You have to buy it straight out. Period.

  12. Ragnar Danneskjöld says

    They can keep their 3G. Customers willing to spend $400 on a phone don’t like waiting in line and don’t appreciate being told that they MUST do anything. Any word on txt messages under new plan?

  13. Once again, the hacking community will have a challenge; I think they will rise to the occasion and figure out a way around Apple’s system. This is why I even purchased this phone. Without jailbreaking, I wouldnt enjoy it nearly as much.

  14. Man, every minute that goes by, I can feel my current iPhone going up in value. Limiting the iPhone to this kind of activation willpretty much rule out other cell providers and non “iPhone 3G countries.” The demand for current iPhones will only go up and up as the quantity gets smaller and smaller.

    Man, the 3G is a horrible failure. Expect BlackBerry sales to soar.

    • To clarify, by “rule out other cell providers” I meant via Unlocking. No one’s going to want to unlock their phone if they are paying for AT&T for two years. They will also not likely give up their phones to the unlockers for that same reason.

  15. good news peopl, i hear their tether will be cracked so it doesnt matter. The “tether us just another software roadblock. It will be faked and cracked in a week or two. Also i hear apple stores may sell the phone, where you are tethered threw itunes activation.

  16. I agree with everyone on this blog that says Apple has made a huge mistake. The way I read it if you buy 3G, you are stuck in a contract for 2 years which will be more costly than it is now. Sure you save money on the phone, but to use the 3G & Text it will be an immediate price hike of $55. With the price of gas and food going up, who is going to be able to afford that hike in cell phone service.

    I am going to be holding on to my current iphone.

    I am concerned that when Apple releases the 2.0 upgrade that might undo my jailbreak. Does anyone have any info on that?

  17. ok so I pay $ 199.99 for iphone , $150 Early Termination Fee
    total 399.99 for 8 G iPHONE , NOT BAD

  18. It is my understanding that we are currently paying $20 for the 200 IMs. It is going up to $30. I just read this in my TIDBIT Newsletter (http://db.tidbits.com/issue/932)

    “Although it’s hard to argue with Apple dropping the iPhone’s price by $200, a fact that came out only after the keynote is that 3G service plans will increase by $10 per month for personal plans, and $25 per month for business plans. That makes the cheapest package $70 per month. Historically, Apple has received a share of revenue, but Ars Technica is reporting that the revenue-sharing deal hasn’t been extended to the new model, along with the fact that current iPhone users who want to upgrade will be able to do so by starting a new 2-year contract, not adding another 2 years on top of the remaining contract commitment. Instead of the revenue sharing deal, AT&T is subsidizing the price of iPhones, according to the Associated Press, a standard cellular-phone pricing arrangement.”

  19. Its sad news to hear that ATT will not allow pre-pay or pick your plan which I have because I still have my T-mobile line (maybe its time to cancel ATT altogether), l guess I have no option but to keep my iphone wait until the 2.0 is JB, it would have been nice to have the faster 3G service….bad move for Apple & ATT…because people may want the faster service and the low cost of the phone but they are not going to spend a total $400 or more to cancel there service with other carriers.

  20. TUAW suggests that pricing has not yet been set for the unsubsidized iPhone 3G but it WILL be coming….

    http://kevinharter.com/2008/06/10/iphone-3g-to-be-sold-unsubsidized-as-well/

  21. I am almost absolute certain that SOMEONE will break this guys. Someone will unlock and jailbreak this one very quickly in some way because I am sure there is that person out there that is pissed off as everyone else and that will drive them to do it even more. It will be done, I say within the first month of release. (assumptions)

    • Its gonna be a race to who can jailbreak and unlock the first iphone 2.0 3G. Check out the front of http://www.ziphone.org
      he is just waiting for the 2.0 fw and its off to the races.

    • It’s obviously going to be jailbroken and unlocked, no ones worried about that. The is issue is in the secondary market, With these new requirements there aren’t going to be too many unlocked 3g’s on the market for a while, your not gonna be able to go sign up att contract after att contract and then canceling to sell the phone.

  22. DA187SUSPECT says

    Go here, it says you can buy one in the Apple store.

    http://www.apple.com/iphone/buy/

  23. Good point Doug, first place to comment on it. People above is mixing up jailbreaking with unlocking, two different things. It is possible to activate a phone and immediately ask for a ETF? It will be a interesting thing to see…

  24. Lawsuit? That’s a little much. Give it time, it hasn’t even been released and people are coming up with ridiculous ideas. It will be broken. Time is our friend on this one. (also you really think anyone here could afford lawyers to stand up against Apple? People are complaining about an extra $10 for faster service….)

  25. Patience. All will be fine in due time.

  26. Candy Cola says

    I am thinking of getting a iPhone like this.
    My friend want to buy a new iPhone, after he bought the iPhone,
    my friend will call the AT&T and say (after some days), its lost, and he will apply for new one with same connection.

    Actually the iPhone will be with him only and he just says its lost.
    So he will buy a new one and I get will get the first one which he bought and I will jailbreak it.

    I don’t know whether this method works, I need to check. ;-)

  27. ooo no!!!! I live in mexico and i know 3g iphone is comming with TELCEL(carrier) to mexico but the thing is that next year i am going to live in connecticut for only one year. So i wanted to buy a 3g iphone in my vacations and use it here in mexico until i went to connecticut and change it to ATT . So can i buy a 3g iphone in US and use it here in mexico with TELCEL??

    • no… you cant, I bought an iPhone before coming to live to Mexico. It sucks because right now here in Mexico I use it like an iPod Touch. Even if you activated it in the US, you wont get service in Mexico with a Telcel SIM..

  28. could u buy one like on ebay and therefore u wouldn’t be obligated to a contract?

    I’m willing to buy the phone but the contract is just too pricey for me

  29. So will you or will you not be able to Jailbreak the 3G?

  30. iambored8907 says

    tuaw seems to think you must buy it in stores, but still activate it in itunes. Since in the fine print it says you need to activate the iPhone within 30 days of purchase. Why would that be in there if you have to activate it in stores?

  31. The part I hate…

    “2G services will be available until further notice”

    That’s just, there’s going to be a lot of pissed off people if they cancel the 2G connection.

  32. How will they be able to cancel the 2g service?

  33. black cat says

    so weird when I have to pay for iphone 3G with activate contract 2 year AT&T right the way in store…
    and after 2 year contract, I have to through that iphone if I don’t want AT&T anymore…
    —–>>> Stupid

  34. So what would someone give me for a brand new 2G 16 GB iphone? I am overseas and can buy them already unlocked and jailbroken at the gadget stores here. :) I am curious how long it will be before I see the 3G version available like that as well.

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  36. This is the way things should be, get off what we are on now

  37. when it says 2 year contract required does that mean at the end of my twoyear contract i can swicth for the iphone for 99$ or i can currently swicht to the iphone with my two year contract for 99$

  38. I got an iPhone 3G as a gift from my best friend. This phone is the best phone that i ever had, great style and great features. I luv my iPhone 3G.
    *.

  39. last year me and my brother bought an iPhone 3G. it is a great phone with lots of functionality and great styling too.

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Trackbacks

  1. […] The last one, unfortunately, is a given, or, rather, an “un-given.” The new iPhones will still be “officially” available only as network-locked devices. I still don’t understand how carriers and device manufacturers can get away with these kinds of practices. I completely understand giving a big discount as part of a subscription package, but I don’t understand how a corporation can lock a network-devices to a specific network. It seems so counter to what the Internet is all about. It would be comparable to buying a PC that could only connect to the Internet via Comcast (Microsoft and Comcast could never get away with that). Anyway, I just hope that one day Apple or Google will use their market weight to force the wireless networks to fully embrace the open devices. Unfortunately, Apple does not seem to be headed that way (see iPhone 3G Requires 2 Year Contract, In Store Activation) […]

  2. […] Originally Posted by infamous12550 Once again i am wondering why you can’t just activate in the store & then terminate service with in your 14, or 30 day service trial period? You wouldn’t have to pay an early termination fee & if it doesn’t state anywhere in the contract there will be an additonal fee for the phone, what can they do? You hae already technically paid Apple for the phone… I am not an AT&T customer so I was wondering if you an purchase insurance for the iPhone with them? Please let me know. Thanx ahead of time. Easy. With the iPhone they extended the trial period to 30 days. If you want to cancel without any fees, you have to return the iPhone when cancelling the contract. If you do not return the iPhone within 30 days, you can not cancel your contract. If you wait 30 days, you can cancel, keep the phone, and pay the normal termination fee. Here is the memo to AT&T Stores: iPhone 3G Requires 2 Year Contract, In Store Activation | Apple iPhone School […]

  3. […] musical complaints include the two year required contract, additional texting plan required, the MobileMe costs, and the fact that the 3G network isn’t […]

  4. […] activation/upgrade, 24+ months since activation/upgrade … The Standard 2-year contract renewal discount is the same for new customers. …iPhone 3G Requires 2 Year Contract, In Store Activation | Apple … […]

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