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Wednesday, March 18, 2009, 11:00 am PT (02:00 pm ET)

AT&T to offer limited iPhone 3G sales without contract

AT&T will begin offering "no commitment" pricing on the iPhone 3G beginning on March 26, without any service contract requirement, according to a report leaking an internal company training memo.

The report, posted by Boy Genius, says that AT&T will only offer the iPhone 3G at its "no commit" price of $599 for the 8GB version or $699 for the 16GB model to existing customers, and limit them to one unit each at that price.

However, the document also notes that AT&T has no way of tracking if the user has already bought a unit at the no commit price within the company's billing system, although AT&T retail stores "can see the transaction through OPUS [AT&T's point of sale system] if the device was purchased through AT&T COR [a company-operated retail store]."

The document says "AT&T is restricting the No-Commit price to existing customers who wish to add a line, purchase as a gift, or perform and [sic] upgrade and are not eligible for the Qualified or Early upgrade price."

"Qualified pricing" refers to the standard $199/$299 price of the iPhone 3G when obtained with a two year contract commitment. For AT&T users who recently received a contract subsidized phone of any kind, AT&T charges an "Early Upgrade price" that is $200 more than the iPhone 3G's qualified price: $399/$499. It also requires a two year contract extension.

The no-committment iPhone models from AT&T incur a device activation fee when used with AT&T's service, and also require a data plan, although device activation is not required at the point of sale.

The new "no-commit" sales program appears to be an effort to push out remaining iPhone 3G inventory prior to the launch of the next iPhone, due sometime this summer. Last year, Apple similarly allowed the existing inventory of iPhones to dry up to the point where almost no iPhones were left for several weeks prior to the launch of iPhone 3G.

Other iPhone 3G partners are similarly discounting iPhone sales to move inventory, which has resulted in various dire rumors about the iPhone's prospects, not unlike last year when certain pundits jumped all over "falling sales" of the original iPhone during the months when inventory levels dried up completely.