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Monday, June 09, 2008, 03:00 pm PT (06:00 pm ET)

3G iPhone to be in-store activated; free upgrade for recent buyers

Apple in the US will attempt to stifle the proliferation of unlocked iPhones by requiring that all of the new handsets be activated at the time of purchase. Meanwhile, first-gen iPhones purchased after May 27 will reportedly be eligible for a free upgrade to the 3G model.

Speaking to Gizmodo, AT&T's President of National Distribution Glenn Lurie reportedly confirmed that there will be no in-home activation for iPhone 3G like there was with the original iPhone.

Instead, all iPhone 3G customers must have their new handsets activated in either an Apple or AT&T store, a process which "takes 10-12 minutes." This should do wonders for the first-day line on July 11, the gadget site speculates. (This was also confirmed during an AT&T conference call, AppleInsider has been told.)

Lurie said AT&T and Apple will provide more details regarding the sales procedures for the new iPhone sometime "in the next week or so." However, he said not to expect online sales of the iPhone 3G at launch, meaning a retail store may be the only place to snag one.

Separately, both Gizmodo and ArsTechnica are reporting that consumers who purchased an original iPhone on or after May 27 will be able swap it for an iPhone 3G at no cost.

The two reports add that AT&T will make all iPhone 3G buyers sign a new 2-year contract which will overwrite any existing contracts. That means AT&T won't tack an additional 2 years onto any existing contracts but will instead wipe existing contracts out and start fresh with a maximum 2-year commitment from the date the iPhone 3G was purchased.