iPhone 3G Hands On, Notes, and Questions

On Monday, Apple officially announced the iPhone 3G. The final phone design matched up closely with expectations as spelled out in our pre-WWDC rumor roundup. The 3G/GPS iPhone also matched up closely with one of the first leaked iPhone photos originally published by iPod Observer. We will publish a full rumor scorecard later this week.

A few sites were able to get brief "hands on" time with the new iPhone (Macworld, Engadget, Gizmodo). Initial impressions included:

- Enable/Disable 3G setting is real, Reception seems better
- Feels similar to existing iPhone, thicker in center, thinner on edges but same geometric volume as previous iPhone
- Volume buttons now silver metal, Clearer speaker audio
- Camera seems same, Geotagging also there

The iPhone 3G will be released in AT&T and Apple Retail stores on July 11th, 2008 at a discounted price of $199 for 8GB and $299 for 16GB. This represents $200 less than the price for the first generation iPhone. While we were hoping details about the launch would be clearer a day or two after the announcement, there are still lingering questions about activation and the sales procedure.

AT&T's official press release only revealed that the iPhone 3G will require a 3G data plan which is priced at $30/month for consumers and $45/month for business users. While some have been quick to point out that this $10-higher 3G data cost offsets the $200 subsidy provided by AT&T, this $30/mo price is indeed AT&T's standard 3G plan for smartphones and has not been artificially raised. Customers with the most cause for objection with this pricing are those who don't live in 3G supported areas. While the new iPhone will default back to EDGE data support in these areas, users will still have to pay for 3G data. But again, this appears to be standard procedure for data plans on 3G-enabled smartphones.

Based on various interviews with AT&T representatives, it appears that activation will be carried out in-store at time of purchase. This is reportedly to deter individuals from unlocking phones for use on other carriers or other countries. Since $199 represents the subsidized price from AT&T, it is understandable that they wish to ensure activation, however, many are concerned that this procedure will slow down lines significantly when the iPhone 3G goes on sale. For users who wish to buy an unsubsidized iPhone, this does not appear to be an option. However, those users can sign up for the iPhone 3G and then cancel their contract after 30 days resulting in the usual (~$200) early termination fee, thus repaying AT&T for the built-in subsidy.

Finally, BoyGeniusReport publishes an internal AT&T memo regarding the iPhone 3G and confirms that AT&T will require in-store activation. It also describes that the customer can cancel their phone after 30 days and pay an early termination fee. Cancelation within 30 days, however, requires the customer to return the phone (and get a refund).

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