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New AT&T policy may restrict Apple Stores from selling iPhone with two-year contract, reports say

According to multiple unconfirmed reports, AT&T is on the verge of making a major change to its smartphone sales model that will prohibit third-party retailers, like the Apple Store, from selling handsets under two-year contract terms.


Current options for purchasing an AT&T iPhone from the Apple Store. | Source: Apple


Earlier this week, Droid-Life reported AT&T is planning to restrict local dealer and national retail locations from offering two-year contracts for smartphones, leaving only the AT&T Next installment program as a sales option. The change only applies to non-company stores, according to The Verge, as AT&T will continue to offer contract sales in its own stores and online.

An internal Walmart document viewed by FierceWireless purportedly confirms the plan, with the big-box retailer scheduled to stop on-contract AT&T smartphone sales on May 28.

Following up on the Apple angle, 9to5Mac on Thursday cited sources as saying the change in policy will indeed affect Apple Store options, meaning customers looking for an AT&T iPhone can sign up for an AT&T Next plan or pay full price. Apple added Next as a purchase option last August.

An AT&T spokesman declined to comment on the matter.

Unlike two-year contracts, which come with an up front fee for subsidized hardware, Next's installment program spreads the full unsubsidized cost over a term of 12, 18 or 24 months, at the end of which customers can trade in the device for a new one. Consumers get the benefit of not having a fixed service contract, but risk having to pay off the device cost in full if they leave prematurely.