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.
[…] subscribe to the the feed.I’m wondering if this would work. PhoneNews.com last week posted a guide on how to get the iPhone 3G for $199, without a contract (emphasis on that last part). […]
This is slightly unrelated but does anyone know if I can use the iphone (either gen 1 OR 3g) with an existing family plan? None of them have iphones. Ideally I’d only pay $9.99/month and still be able to use the wifi.
From talking to someone at the AT&T store it sounds like I’d be forced to pay $20/month (or is it $30 for the 3g?) for a data plan when I activate… Is there any way around this??? I really don’t care about data- I just need a phone for emergencies and it would be a bonus to be able to use the wifi. And I don’t want to pay more than $9.99/month.
I forgot to ask- if I get myself added on a $9.99 family plan do I have to sign any kind of contract?
So did anyone try this method and get the new Iphone 3G yet?
I went to the apple store to find 500 people in line…. I’m gonna wait till next week to get it. Oh, and I got my tilt today 🙂
@help
Officially you are suppose to only use AT&T’s iphone plans with a stock iphone. But I understand with an unlocked iphone, you should be able to use it with any compatible GSM plan which includes postpaid, or prepaid from any GSM provider.
@aloha yao
also waiting for feedback from people here.
@cubara
Thanks… I *want* to use AT&T’s plan. I want to add an iphone to my family’s existing family plan for $9.99/month. But I don’t want to have to pay $20/month (or $30 for the 3g) for data. That’s the question- if that’s possible. According to the person I talked with at the AT&T store- it’s not- I’m forced to sign up for a data plan.
@help
Right, you would still need an unlocked iphone to use AT&T’s non-iphone plans.
[…] Did the convoluted cheap iPhone 3G guide actually […]
you can buy the new 3G Iphone without a contract by simply asking at the apple store!
they offer 3 ways to buy:
1. old iphone customers with the upgrade get them for 200 and 300
2. people not eligible for an upgrade get them for 300 and 400
3. people not wanting a contract get them for 600 and 700
and i just got off the phone with the AT&T sales rep who told me that yes you can put them on the pick your plan pre-paid plans. all you do is take your phone you bought from the apple store home and connect it with itunes. click to activate and when it notifies you that a deposit is needed click to activate without one and it will give you the option to put it on the pre paid accounts.
there you go, its legal and works a side from the hefty price tag
also if you want to get one even cheaper then the crazy plan offered by the guy on here then do this:
go pay the 600 or 700 for the new iphone 3G ( 8gb or 16gb). then go home and put the dam thing on ebay so one of the morons on there can bid on it. they are selling upwards of $1200.00 right now!
you should be able to double your money or get dam close to it. once you did that then take your money from the sale and put the 600 or 700 back in your bank and take the rest you made back to the apple store and buy another one out right with no contract.
there you go
Pat, whoever told you that at the Apple Store was untrained, and probably should be fired. They must have held their hands over their ears during training. Safe to say, your experience is more than atypical.
Will this whole ‘action plan’ to get iphone 3g (w/ tilt & iphone 1st gen) work if I order a tilt after July 11? My concern is, if I get my hands on a used iphone 1st gen now, can I change my activation from tilt to iphone 1st gen?
so I have a question I recently had the iphone edge and it got stolen while i was in europe…I had to get a replacement gophone and now that shows up in my account information i want to upgrade to iphone 3g but do i have to use my upgrade or can i tell them i used to have an iphone..if not is there anyway i can manually input my imei number off the box to my att account?
yo, i just upgrade to a tilt from my iphone 2g (since i was out of contract) on the at&t site.
I’m going to leave the iphone on the line and sell the tilt when it comes in the mail.
Can i still get the iphone 3g for 199? Since iphone 2g is still technically on my line, i should be eligible for upgrade?
So I thought I would share my own little tweak on this plan that I successfully ran through yesterday. I got in line at 3:50 am for the new iphone. I went in to upgrade from my existing iphone to the new one. After getting through this… wasnt able to activate in store because the activation servers were down… I went home and took a nap. At around 2:30 pm activation servers were back up. I activated my new phone, put a new sim that I got a few days before into the old iphone, plugged it in, and activated it on my other plan (week old, refurbished tilt plan for my wife). I went right back into the store and then upgraded that plan to get my wife the new iphone also. Then I am selling the tilt and the old iphone on ebay to pay for our 2 new phones which we got for the upgrade price. I also had 2 couple apple gift cards so I wont have spent a dime. Thanks for the advice.
Will the guide work post july 11 purchase of the tilt???
Aaron: You did this all on 7/11? looks like the prior to 7/11 is not real? Cleary, you activated it yesterday which by definition is not prior to 7/11. So we have hope?
FORWARDED THIS THE APPLE, goodluck *********
Snitch ER …..you are a ****. Your karma is going to suck. It probably already does.
Just to clarify, this guide will not work (as well) after July 11.
Apple’s agreement with AT&T required you to activate your first-gen iPhone before July 11.
If you attempt this guide now, you will be paying $399 for iPhone 3G (or $499 for the 16 GB).
Now, you will still benefit from this guide probably (the Tilt is still worth more than the $99 + $175 ETF + $18 Upgrade Fee)… but you certainly won’t get an iPhone 3G for $199 without contract.
A question guys, I got my Iphone 3G on July 12th…Do I cancel on the 30th day from that, or the 30th day from when my account was started? I opened a new line with ATT on July 8th. Thanks.
@jon, u misread this whole guide. You won’t benefit from canceling. If you do, you’re going to have to sell your 3G on ebay.
@chris: I upgraded to a tilt on 7/12 (out of contract, eligible). I activated my old iphone 2g yesterday on 7/12 as well. And this morning, it shows i’m eligible for upgrades again…
so you tell me what this means.
Once my tilt ships, i’m going in to the store to see if i can upgrade to the iphone 3g.
@minh
I wanted to have the Iphone 3G, but without a contract. I still do not know when to actually cancel the account. Any ideas?
@jon, The Original post stated you would need an original iphone. You should first, upgrade to the tilt. Then activate the old iphone on the current line. This would make you eligble for the $199 iphone 3g again (after buying your tilt at 149). Buy the iphone 3g for $199. Now you essentially bought 2 phones at discounted price. You don’t need 2 phones. Sell the Tilt (~$380).
Math
AT&T Tilt Refurb price with 2-year contract: -$149 now.
Activation Fee: -$36
Activated OLD 2g iphone: free
BUY iPhone 3G 8 GB: -$199
One month of service: -$70
then cancel:
Early Termination Fee: -$170
Total Costs: -$624
sell:
eBay value of AT&T Tilt Unlocked: ~$380
$624- $380 = $244… and no contract.
Why would AT&T just give you the phone after 30 days? I’m guessing in the contract you’re agreeing to return the phone within 30 days, even if the store is closed, wouldn’t they ask you to bring it back the next day? I would think you’d still be liable to return the phone even though the store is closed that day, anyone else see the logic behind this? And if you didn’t return it, they’d probably hit you with the full price $599 or $699, less what you paid, to keep the phone. Anybody?
As an AT&T employee I can tell everyone that we are well aware of this loophole and that you now need to have the 2G iPhone on your account for 90 days before you are upgrade eligible for a iPhone 3G at the $199 price. Also Mr. Price’s referral link is indeed in violation of the referral TOS.
You get the phone because you pay the early termination fee, which reimburses us for the loss of monthly payments. It’s how subsidies on phones work.
Ryan, not to be blunt, but put up or shut up on your last point. We’re sick of people making up contracts terms that don’t exist.
Telling people that paying the Early Termination Fee nets them a lower cost is not a violation of any agreement. AT&T made the convoluted pricing, it’s up to them to either live with it, or restructure iPhone 3G prices that make a bit more sense.
I work for AT&T, so I think I would know a little bit about how things work with this company.
If people want to cut and run after 30 days, they can. It’s not against anything.
What you are doing is luring people into a trap for your own profit. It’s sickening.
@minh
Yeah, I read all that and followed it. I bought the Tilt, activated it, then activated my old Iphone. Next, I bought the Iphone 3G for $199. I just need to know when to cancel my account so that I do not get charged for 2 months of service. I Ordered the Tilt on July 8th. I received it on the 11th and activated that day. The next day the 12th, I was able to purchase the Iphone 3G for $199. Do I cancel the plan on the 30th day starting from the 12th or from the 8th when my phone was ordered? Thanks for the replies Minh. Any input from others would be also helpful. Thanks!
CHRIS
I HAVE A DIFF. CARRIER AND WAS THINKING OF HOW TO GET A NEW 3G W/OUT ACTIVATING A AT & T CONTRACT.. SO CORRECT ME IF I’M WRONG…
MY FRIEND BOUGHT (IT WAS AN UPGRADE 299) THE NEW 3G.. I TOLD HIM TO GO IN THE APPLE STORE AND SAY THAT HE LOST HIS NEW 3G.. WOULD HE BE ALLOWED TO BUY A NEW ONE FOR 299? WOULD THE OLD 3G STILL WORK AS AN IPOD UNTIL UNLOCKING BECOMES AVAILABLE FOR ME? HELP ME OUT HERE BECAUSE I DON’T SEE HOW THIS WOULDN’T WORK…
That would not work, the replacement iPhone 3G would cost $499, and require another renewal of the 2-year agreement. Theoretically after 90 days they might let him/her buy as a first-gen iPhone buyer, policy isn’t really clear there as to if iPhone 3G owners can buy a new iPhone 3G at the new-customer price after 90 days.
P.S. All-caps are not needed. Please don’t use them in the future.
I didnt know about that having to activate the old iPhone before July 11th bit. But yes I did everything on July 11th and it worked for me. I must have slipped through the cracks if it isnt working now.
This is a nice guide.. I wish I could’ve seen it sooner. Not sure why everyone is so up in arms about it. It absolutely would work if you had a 1st gen. iPhone pre-July 11. Why?
Owners of the 1st gen iPhone (pre-July 11) DO qualify for the $199/$299 upgrade prices regardless of time since last upgrade/remaining time on contract.
After 30 days you CAN cancel service, pay the early-term fee, AND keep the phone…..
It’s as simple as that..
I bought a 3G on Friday. I have all of the paperwork and contract terms. Clearly, within 30 days, return the phone. After that it’s the early termination fee, and see ya later.
@Michael
I got my Iphone 3G on the Saturday July 12th. Do I cancel on the 30th day from that or from when my account was established with the Tilt? Thanks.
this is a dumb plan for anyone:
u can buy the phone for 400 without a contract, so why pay 200 and then money for a plan for a month and then cancel on the 30th day and pay 170, that puts you over 400. are you stupid? ? ?
if you have a family plan with 3 or 5 lines, and you get 5 iphones for 200 each, then you can possibly sell the extra ones you dont really want and switch those lines to regular phones and make some money off the whole thing. and i guess you have to start a new 2 year contract.
you can also always claim that you have no signal anymore at home and then they will likely cancel your contract. if they dont call your state consumer protection dept and they will email att for you and get you cancelled. att has terrible signal quality in many many areas where people work and live .
you can also loose your phone or have it stolen (meaning sell it ) and you should be able to go to a apple store and buy another one and put it on your account. i mean what would they do now if you lost your phone? ? they would sell you another one rather than have you go to another company . they make 1200$$ a year off you so they dont want to loose you.
@john: Retail iphone with no contract is 600 & 700 for 8gb and 16gb respectively. Where are you getting your $400 from?
Hey, but as I know you have to _give_back_ your old iPhone (not just flash it to AT&T rep) if you want to uprgrade to 3G for $199 anyway
Al, you’re completely wrong… you do not have to give anyone an old iPhone at any point. Neither AT&T nor Apple want your iPhone back.
Now, if you bought a first-gen iPhone within 14 days of the announcement of iPhone 3G, you can return that device as part of a return extension.
The only take-back program for the first-gen iPhone is for recycling. To repeat, you absolutely do not have to surrender your iPhone in order to get a cost discount, no such program exists.
i just ordered my iphone last night. I got my tilt on the way as well. Looking good guys :). I did this all AFTER the 7/11 date. Still hope for this loophole.
minh, how did you order your iPhone if the in-store purchase required?
also confirming this works with iphone activation after july 11th. just got my phone today after standing in line for 4hrs, so would like to thank Chris et al. for this wonderful guide with step by step instructions. the iphone activation part was confusing tho. note that you do not need a new unprogrammed sim card. using the 3g sim from the tilt to activate is fine. you can still put the sim in the tilt after activation with the iphone. just the iphone is restricted to the sim card it is activated with.
sorry i couldn’t finish reading this. OMG are you guys that serious why are you ppl so crazied about this phone. first of all i don’t think you really know what your talking about in your instructions. Yes it will work to a degree but not all the way, once you activate a 2g iphone it will make u eligbale for the cheaper price for the 3g iphone you can not just cancel the lines. if you activate a 3g iphone and want to cancel the service you will HAVE TO RETURN THE DEVICE, also if you did return the 3g iphone and still want to cancel with the original tilt you purchased, you will pay the cancelation fee as well as a “liquid damage fee” this is for those ppl that want to activate lines to just get equipment. no one ever tells you about that, so you will pay more in the end. if you want to try it for yourself go ahead. oh yeah ATT doesn’t pay peanuts for phones, yes they pay less for it then the suggested retail price but it is more then the price after all discounts and mail in rebates, think about it, some phones are free. they aren’t free to make and sell for the cell phone companies. if you don’t want the 2 yr service don’t get the phone.
there is a way to get the a lot of these phones to sell, but since it just came out i don’t know if it will actually work. hey if i find out if it does work, you might see me selling these 3g iphones =).
Oh yea PS as of right now regardless of price there’s a 2 yr contract required, there is a NO CONTRACT price yet, maybe later this year once everyone has the phone and no point to buy.
iHate iPhone
Again, you are incorrect on this point. We’ve re-iterated several times… you only have to return iPhone 3G if you cancel service within 30 days. Once you are out of the iPhone 3G return period, you are subject to the ETF, but do not have to return the phone.
Here’s what you do to get a 16gb iphone 3G without 2 year contract. Sign up for ATT, buy the discounted 16gb iphone for $299, pay $70 for the first months service and then on the 30th day cancel your account for $170. You end up paying around $570 (including all taxes)as opposed to the $750 (with taxes) you would pay for the 16GB iphone bought without contract. And the kicker is that your $570 price tag already includes 1 month of service. You can also sell that 16GB iphone on eBay for around $800-$850, or well over $1000 if you manage to unlock it. Not a bad profit.
What if i have an already used att sim card from a while ago because i used to have ATT,And i took that sim card and just put that in the new iphone. would it unlock the features that i need (cus its cheaper than the ipod touch and thats all i want.)
Can anyone confirm if this still work?
Are you sure you dont have to maintain the old iphone for a amount of time before being eligible for upgrade to 3g?