We’ve compiled a how-to guide that works the system, and will net you an iPhone 3G on July 11 for about $199, and leave you without any contract at the end of it all.
The process only requires that you (or someone you can borrow) does not have active service with AT&T. Want to know the steps? Read more to find out.
Update: Our links have been updated to take advantage of a $50 coupon that AT&T is offering on PDA Phones. The process is the same as before, but now, the deal is even better than ever!
First, why would you want to do this?
Several reasons, really.
One, you may be an iPhone hacker, looking to get an iPhone 3G that isn’t tied to contract. This is the cheapest way to do that, by a good few hundred dollars.
Two, if you have an original iPhone under contract, using this method nets you an iPhone 3G without a contract reset.
Three, you may want to buy one for use on another carrier. While iPhone 3G will undoubtedly be locked to AT&T at launch, hackers will undoubtedly begin working to unlock the device for use on other carriers.
Four, you may be on AT&T prepaid service. While we can’t guarantee that iPhone 3G will work on GoPhone plans, there is evidence to indicate that it will.
Five, you want an iPod touch that just happens to be the latest cell phone as well. It’s just as cheap, and leaves the door open for you to sign up for service later.
Here is what you need for this process:
1) Someone without an active AT&T account.
2) A first-generation iPhone. It can be used.
We have tested this guide up to the point of purchasing the iPhone 3G. According to AT&T’s guidelines for upgrading to an iPhone 3G, there should not be any issues with this guide.
See, as a part of Apple’s re-negotiations with AT&T, they put in one requirement; anyone with an iPhone on their account, is entitled to upgrade to the new iPhone 3G as if they were a new customer. We are going to exploit this as a loophole.
Step 1: Setting up a new account with AT&T.
The first step is to sign up as a new customer, but not with an iPhone. Instead, you need to order online using this link (which takes you to AT&T’s online store) and get a phone without any mail-in rebates. We stress that you should use the above link and not order from a third-party store, for reasons that will complicate this guide (but trust us, order direct using the above link).
Update: Now you really, really need to use this link. It gives you a $50 discount when ordering.
We suggest buying a refurbished AT&T Tilt as your phone of choice. This is a good phone because it is heavily discounted, and there aren’t any rebates. More on this later.
When your phone arrives, set it up with the new service plan that is bundled with the phone. Make a test call.
Step 2: Activating the first-generation iPhone.
Now, we’re going to take the first-generation iPhone and activate it.
(If this is a used iPhone, then go to your nearest AT&T store and ask for a new SIM card (they’re free). Insert the new SIM card into your iPhone.)
Next, connect the iPhone to iTunes. Follow the iTunes activation process, and be sure to chose the option to upgrade from your existing phone. iTunes will then transfer service from the phone you received from AT&T… to the particular iPhone.
Step 3: Buy the iPhone 3G.
Now, by activating the first-generation iPhone on your account, that makes you upgrade-eligible for iPhone 3G. Upon July 11, you simply need to wait in line, flash your iPhone to the store representatives, and walk out the door with iPhone 3G for $199 (or $299 if you chose the 16 GB iPhone).
Step 4: Cancel service. (Optional).
For this, you will have to wait exactly 30 days. On the end of the last day of the first month, call AT&T and tell them you wish to cancel service. It may be best to do this after the local AT&T store closes in your area.
Why? Because AT&T has imposed a requirement that you return your iPhone within the first 30 days, if you wish to cancel service. So, we simply wait until it’s not possible to return the iPhone 3G on the 30th day. This prevents you from paying for a second month of service.
You will have to pay a $170 early termination fee ($175 less $5 pro-rated for the first month).
Step 5: eBay the first AT&T phone, and the iPhone. (Also optional).
Remember that phone that we bought from AT&T, before activating the first-gen iPhone? Well, to recover the cost of the early termination fee, and one month of service… we’re going to sell that first phone.
Now it starts to make sense why we suggested the HTC Tilt. First, it’s cheap. Second, it’s popular. And, third… it’s easy to unlock! Unlocking a phone easily adds $50 to $100 to the cost of a device like the Tilt, so being able to do it easily is just a free bonus.
Also the lack of a mail-in rebate means you don’t have to hold onto the device for six months to get part of your money back.
Finally, you can eBay the first-generation iPhone. Unlocking that as well will increase its eBay value.
The result? The “profit” in selling the two under-contract devices for a no-contract price on eBay will cancel out the ETF and the first month of service. Of course, based on eBay prices, which are variable… we can’t say with certainty that you will wind up with a net cost of $199 for iPhone 3G. However, it should come close.
Here’s the math, in case you’re wondering:
AT&T Tilt Refurb price with 2-year contract: -$99
Activation Fee: -$36
One month of service: -$70
Early Termination Fee: -$170
iPhone 3G 8 GB: -$199
Total Costs: -$574
eBay value of AT&T Tilt Unlocked: ~$380
$574 – $380 = $194… that’s less than the price for an iPhone 3G, and you now have no contract. You can then sell the iPhone 3G, or activate it on another line of service.
And, of course, there is one more thing.
We do caution that while this is kosher with AT&T policy, this guide will probably become very popular, very fast. It is possible that AT&T will impose a limit of today on iPhone owners to establish service, and be able to buy an iPhone 3G at $199/$299.
It is unlikely however, that AT&T will make such an announcement retroactive. So, sign up for service today and hurry up! It’s not likely that AT&T will allow this deal to continue for folks that activate iPhone after the 11th.
But, what about?
The most common feedback we received in testing about this guide was the following: “How am I going to do this with my iPhone that is already under contract with AT&T?”
Simple. Have someone else establish service with AT&T. You put your iPhone on their account, and they then upgrade from Tilt, to iPhone, to iPhone 3G. Legally speaking, you’re giving your iPhone to someone else for a week, and putting your existing AT&T account on another device (like, that super-cheap phone your friend just got from AT&T).
We aren’t here to debate the ethics of this procedure, we just figured it out, put it in motion, and are all doing it ourselves. The idea stemmed from the fact that folks at PhoneNews.com all use iPhone 3G on GoPhone Pick Your Plan accounts. This is something supported by iPhone, but AT&T has prohibited on iPhone 3G.
We will note however that iPhone 3G is the only device in the industry that is not for sale without a contract of some form, and that anti-consumer practice at launch is something we feel is unacceptable. While iPhone 3G will eventually be available without contract (and probably on prepaid as well), we feel it is not reasonable to prohibit such sales from day one.
[…] most time spent on line. Talk about pointless records. Maybe they’ll find time to read about how you can get a 3G iPhone for $199 without a contract. At least this isn’t in Canada, where high data rates has Apple ticked off, to the point […]
WHERE IS THE “LINK ABOVE” PLEASE CLARIFY
Susan, that would not fix the loophole. All it would do is prevent multiple people from taking advantage of this deal by using a single iPhone. And, there’s no evidence that AT&T will even do that in time for the July 11 launch.
Further, if iPhone 3G does work with GoPhone prepaid service, then it does make for an excellent GPS device. You would just pay $19.99/month for the MEdia Net data package, and have unlimited GPS access.
“you need to order the first phone using the link in the article.”
WHERE IS THAT LINK???
Wait for the refurbs people!!! $249 for 8gb 3g or $349 for 16gb. Hell, I got my $249 8gb iphone on June 1st w/o any ties to ATT. Unlocked and now with tons of apps. I’ll be busy with this one and will wait until the day I can buy a refurb w/o contracts and there is a hack to use T-mobile’s 3g. That will be the day I will join the 3g iphone bandwagon.
Mr. Q, it is very unlikely a refurbished iPhone 3G would cost anywhere near that price. With the no-contract pricing set at $599/$699, you’re looking at best-case $499/$599 for refurbished stock.
Steve, the link is placed three times in the article, look for the blue, underlined links.
I guess we’ll see after 1yr. I can live w/o 3g, so can most people. However, i can’t live while ATT is milking me for 2yrs.
Pertaining to the assumption that one will be able to cancel service without returning the iPhone…. WRONG! I know firsthand through knowledge gained through my own employer that att has placed a similar restriction as my employer on their accounts that they will have to verify the return of the equipment or else no cancellation. If for some reason they do get past the system, the system auto-bills the account for the entire retail price of equipment without a billing code being placed on the account to waive such charges; I deal with it everyday and mark my words, beginning July 11 Big Blue will be doing it too. Won’t work… period.
The Competitor Guy, we figured out how to get around that by waiting a full 30 days. After the end of the 30th day, you are not required to return the equipment anymore. Instead, you pay the Early Termination Fee.
Here, we want to pay the Early Termination Fee, since that is canceled out by the profit generated on the sale of the Tilt.
Under no circumstances can AT&T require that you both pay the ETF and return equipment. All the carriers argue that the ETF is required because of the cost of the device to begin with.
so, in order for you to get the iphone 3g for 199, you have to show apple the 1st gen iphone? will they take the 1st iphone in order to get the discount rate?
S Wrong, no, you get to keep your first-generation iPhone. AT&T is not taking away anyone’s original iPhone when they upgrade to iPhone 3G.
Goto http://www.wireless.att.com/cell-phone-service/specials/iPhone.jsp
can someone who followed this guide see if he/she is eligible for an upgrade???
So, will they have you activate the 3G iphone there and extend the contract while at the apple store, or will you bring it back along with your 1st gen iphone. so if I have a 1st gen iphone and buy the 3G iphone, will i be able to give the 3G iphone to my brother to use while I use the 1st gen iphone or will the 1st gen iphone become unactivated since i bought the new one
So, has anyone actually confirmed that a 2g iphone activated today will actually allow you to select the old plan and NOT require you to update to 2.0 first?
Hey there, please tell me what I can do in this scenario:
I am a current AT&T customer on a Family Plan, eligible for an upgrade (so I can pay $199 for the iPhone). If I sign up to add the $30/month iPhone data plan, can I cancel that and pay the ETF, and go back to my regular voice plan but still use the iPhone in its non-unlocked state (until it gets unlocked)? I’d be very interested in that possibility…
Actually, let me revise that. I will sign up as a new customer (since it’s not my name on the family plan) with a new line and everything so I can get the $199 price. Then during the 30 day period I’d like to use my original SIM card in the iPhone, then cancel and hopefully unlock the phone. But while it’s still locked, will I be able to use my other AT&T card with it?
If you do not want to eBay the original iPhone or Tilt, http://www.flipswap.com is paying up to $200 for 8Gb first gens and $187 for tilts (I am not affiliated).
Also http://www.zendoo.com has used first gen iPhones at pretty substantial discounts (I am affiliated with this website).
At this point, it probably is too late. The order would have to ship by today for you to get it Friday… and I doubt any more orders will ship today.
You can still do this deal by buying a phone in an AT&T store (one without any rebates). However, the numbers would be off and you’d have to whip out a calculator and do the math yourself…
Remember, you have to have your first-gen iPhone active on the account before July 11th. With two-day shipping from AT&T’s online store, it looks like that’s not an option anymore.
Again, ChrisP, you have not clarified if you know for sure that the account needs to be active before the 11th, and if iTunes will even allow you to make an account at this point. Have you actually went through this procedure all the way up to the point of buying the 3g phone (which will happen on friday and we know you haven’t done yet)?
Do you get charged an additional actiavation fee when you sign up for the iphone 2g account?
To get this to work, why can’t someone choose overnight shipping?
As I have said, you need to activate the iPhone on the new account before July 11.
As I have said, yes, we are doing this in-house. I have my refurbished AT&T Tilt on my desk right next to me.
Activating the 2G iPhone does not charge an $18 fee. Activating the 3G iPhone however, will charge that fee.
You can chose overnight shipping, but it’s not something we reccomend. Any delays in processing the order would leave you without a device, and an open account (meaning you couldn’t walk into the store and buy an iPhone 3G as a new customer).
Thing is, if they do not get it to me in time I can just tell them to cancel the whole thing because they were too slow – either way I do not lose out….
so… can I terminate the contract oversea?
I leave the country for school exchange next week…
199+170+36+70=475 for an iphone 8GB w/o contract is ok for me. still better to buy an unlock phone from AT&T for 599.
i am confused… why do we need to activate an account w/ AT&T prior july11?
Question – can I take the sim from the tilt and put it in the iphone to activate the iphone? Or do I have to get a new unused sim card from somewhere??
I was wondering if someone could give me some input. I currently have an original iphone on AT+T contract, but would really like gps+ bigger memory. 3G wont be in my area for many years I am afraid, so thats really a non issue. i just dont want to pay all the extra money monthly for no added features.
Would I be better off adding a second line with the 3g iphone, and cancelling after 30 days, keep phone and use original iphone sim or would att block the phone after i cancelled?
I am asuming that in this scenario i would keep original iphone and contract, be able to use new iphone under old contract effectively gaining a 3g iphone for slightly cheaper than non commitment 3g iphone and an iphone to pawn off or give away.
Any input would be appreaciated.
Can we activate old iphone after July 11th,
I have ordered the tilt today. and im sure i wont get it by friday for sure. Can you give me some officially source which denies activating original iphone after july 11? why this idea cannot be used after july 11?
A few points-
Att does next day shipping – the 2 day thing is just extra time for them to process. So you may get it in time still. Call the order support line on wednesday and find out from them if it has shipped yet… (ships from tx)
My question about the sim has not been answered, but here are 2 scenarios:
If you have to have the sim from the tilt then if you don’t get it in time….. we know what happens
If you can use a different sim, you can probably call att and get your acct info from them and manage to do this regardless.
If you have no choice but to use a diff sim, then all you need is ur acct info…
Last point – will the current version of itunes available on apples site allow you to do this or do I need a copy of an earlier version of itunes. I just downloaded version 7.6. Which version did phonenews use?
Someone raised the point of AT&T charging $599 for an unlocked version.
To be clear, the full contract price does NOT mean that the device is unlocked. When you pay $599 to buy iPhone 3G without contract, it is STILL locked to AT&T.
We do not know when an unlocking solution will be available, and to-date no iPhone 3G has been confirmed to be unlocked.
chris what about the rest of my questions??
The problem with your idea (in your previous comment) is what you may not be able to switch SIMs on a phone that hasn’t arrived yet. AT&T often requires you to call in before activation is completed. Then you would be stuck with a phone which hasn’t arrived yet, and be unable to activate a new line of service for your iPhone 3G.
As to activating the first-generation iPhone, we used to current version of iTunes, but that really isn’t necessary.
Your response seemed kinda cryptic – but it seems that you are verifying that if the phone DID arrive, then I indeed can take the sim out of the tilt and put it in the iphone and everything should work fine…
If I am wrong, please correct me…
It’s not cryptic, you just haven’t read how iPhone activations are different from a typical GSM phone.
To activate an iPhone, you connect it to iTunes. The iPhone uses the SIM inside of it, and transfers service from one SIM to the other.
If your iPhone has already been activated, you need (as the instructions above read), another blank SIM. You insert a blank (unprogrammed) SIM into iPhone, and then iPhone activates that SIM, transferring service from the SIM inside of the Tilt.
So, you need the Tilt with its SIM, you need your iPhone, and you need an unprogrammed SIM (either one that comes with the iPhone, or a second blank one from an AT&T store).
Oh ok, thanks for clearing that up. Now att will be glad to just hand the sim over to me?? I thought they charge 20 bux for it…(they used to..) Maybe I have one lying around somewhere…
Thanks
It is policy to give the SIM away at no charge, unless you lost the SIM. Non-corporate stores may charge for them. iPhone activations are not supposed to have a charge for a new SIM, since you need a new, blank SIM to activate the iPhone.
How does AT&T’s online activation work? With the 11th only a day away, if I order the Tilt right now, could I activate it online and then activate an old iPhone before the 11th? Or would I have to wait for the Tilt to arrive in the mail before activating and moving to the next step?
Jesse, as we posted above… you risk not being able to do that. It is possible once you are emailed your phone number to attempt iTunes activation.
However, until a test call is placed from the Tilt, there is no guarantee that the account will be provisioned for use.
We can’t verify if that will work or not, and as such… we aren’t recommending it. Nothing is stopping you from trying, just keep in mind that it may not work.
Thanks for the reply.. a thought just occurred to me; If you bought a no-contract 3G, then went through the above steps (Tilt -> iPhone activation) with a 3G instead, and then ebayed the Tilt afterward, you could essentially unlock your 3G for the same price as the no-contract phone.
AT&T Tilt Refurb price with 2-year contract: -$99
Activation Fee: -$36
One month of service: -$70
Early Termination Fee: -$170
No-contract iPhone 3G 8 GB: -$599
Total Costs: -$974
eBay value of AT&T Tilt Unlocked: ~$380
$974 – $380 = $594, and voila..unlocked iPhone 3G for the same price as a no-contract AT&T locked 3G.
Jesse, you’re making a common error. Buying an iPhone for $599 does not unlock it. The no-contract price for iPhone 3G still leaves you with an iPhone locked to AT&T. This guide also will result in a locked iPhone 3G.
AT&T has said that Apple will not allow them to unlock any iPhone.
So I went to an ATT store to get a “free” sim card. They refused to give it to me for less than $25 unless I activated with them right there and then.
total cost + $25
Ben, did you tell them it was for an iPhone activation? If so, they aren’t supposed to impose the fee. That’s a violation of AT&T policy, as first-generation iPhone activations are to be done at home.
Alright so lets say I end up getting the 3G iphone without a contract…..What will happen if I put my first generation iphone sim card into the 3G iphone? Will it work? Also will it still be the same $59.99 plan if I am using my first gen iphone sim in the iphone 3G? Does anyone know?
Chris,
I did tell them that and they refused. I went back w/ my iphone and laptop ready to do it in store, and then they refused too. If you show me exactly where the policy is maybe I can hold them to it… but that guy was a total idiot – I’m gonna have to try a different store….
Regardless I found a sim on the floor that looked new – and I got my phone # in my email (even though the tilt will be arriving friday) I activated through itunes, and I got an email that activation is pending…. hopefully it will go through… I’ll update when I know..
Thanks…
Jon Jovi, you cannot activate an iPhone 3G as you have described.
iPhone 3G must be activated in an Apple or AT&T retail store. There, the phone is “debricked” which enables it for use on a qualified AT&T plan.
We do not know if, after that point, you will be able to use unsupported SIMs or plans with the device. We won’t know that until the phone is released and in our hands.
anyone have any experience with the activation pending thing? Strange…. after I did it my iphone now will only allow me to connect to itunes and do emergency calls….I guess its been unactivated but not reactivated…
I have two questions:
First of all, will AT&T disable the phone after you cancel their service?
Also, what software are you guys going to use to the iPhone to be able to use any sim you want?
Unless AT&T is really dump at math, I do not believe the cancellation fee would be $170.
Because lots of people will buy it for 200, way for 30 days, and take 170 penalty = 370.
Which is still a lot less than 600 for uncontracted.
Update – activation went through – my iphone is running and activated. My tilt arrives tommorow. As long as you get your new # in the mail, you can get away w/ doing this…
I want an iphone trade oven and fridge for it and microwave for 3g?
OK, I know everyone here will laugh but I bought the Gen 1 iPhone on May 15th. 16GB no less. Guess I should have done my homework. I’ve been asking for a trade-in to no avail. Any suggestion as to the smartest and cheapest way to upgrade? I am ATT.
How long does it usually take from iphone activation to upgrade eligible status showing up on your account?