Buy an iPhone, get a free phone?

It’s either a good deal or a scam. But it works like this…

To get you into a two-year contract, AT&T sells cellphones at drastically reduced prices. (They’ll give you a Nokia N75 for $25, saying it includes a $250 “equipment subsidy.”) But once you’re an AT&T customer, you can switch your two-year contract to the iPhone. You’ll end up with an iPhone and its two-year contract — plus a second phone.

With any other phone, there’d be an “upgrading,” penalty. But apparently not with the iPhone. “Adding the iPhone is no different than if you lost your new phone and paid the full retail price for a new iPhone,” writes Christopher Price at Phone News. “All that AT&T does is reset the contract date to a full two years.”

AT&T’s small print warns there’s a $250 penalty if you switch to a less-expensive service plan. But if the iPhone plan costs more than the original plan — there’s apparently nothing in the fine print to stop you. “Just choose a voice plan only,” Price advises — and don’t decrease your minutes plan for the first six months.

He expects AT&T will spot the loophole soon, and predicts they’ll probably tack on an early termination fee. His advice? “Do it now!”

AT&T’s been heavily criticized for its monopoly status as the iPhone’s only carrier — so it’s nice to see cellphone consumers finding their own subtle advantage. I agree that it can’t last forever. I saw this discussed on another bulletin board Friday, so word is already spreading quickly.

But even if AT&T eventually closes the loophole, this will still represent a kind of triumph for the internet. Gadget-hungry geeks networking online spotted a mistake in the corporation’s small print, and found a clever way to take advantage of it.

Related:

Entry was posted on Sunday, July 22nd, 2007 at 12:06 pm under Apple, Cell phones.

Read more entries by David Cassel.
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