The faster, cheaper iPhoneMore VideosNEW YORK (AP) -- AT&T Inc. will sell the new version of the iPhone without a service contract for $400 more than the price with a two-year plan, a break from the rules set when Apple Inc.'s popular touch-screen gadget debuted last year.Two new models of iPhones go on sale July 11 for $199 and $299, depending on the amount of memory, with two-year AT&T contracts.
The contract-free versions will cost $599 and $699 and will be sold sometime "in the future," AT&T said.Service feesThe phones sold under contract are subsidized by AT&T (T, Fortune 500), which expects to make the money back through monthly service fees over the life of the contract.
Without a contract, users can cancel service and not incur an early termination fee. But both contract and contract-free phones will be "locked" to work only on AT&T's network, and the monthly service plans available will be the same, said AT&T spokesman Michael Coe. The plans add a $30 monthly charge for data like e-mail and Web surfing on top of a calling plan.
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