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02 launch the first pay-as-you-go iPhone 3G

A pay-as-you-go iPhone 3G will be launched later this month, allowing customers to use the device without subscribing to a long-term contract for the first time.

The prepay handset will be available from September 16, priced at an eye-watering £349.99 for the 8 gigabyte version and £399.99 for 16 gigabytes.

Although the initial outlay is steep, analysts say it will appeal to customers who want to stay in control of their spending, and those who make few phone calls.

They have also predicted that it will top the Christmas best-seller lists as teenagers clamour to have the latest technology now they, or their parents, are not required to sign-up to a contract.

It will also suit those who are reluctant to lock themselves into an expensive 18-month deal when the economic future is so uncertain.

Ben Wood, head of research at technology analysts CCS Insight, said: “This is huge. I think we’ll see people queuing up outside the stores for it. People are increasingly nervous about locking themselves into long term commitments especially in the light of the current economic downturn.

“The iPhone’s long contract length and expensive monthly contract charges have deterred a vast swathe of UK subscribers from buying one - that has all changed now.”

The phone deal, which will be available from Apple, 02 and Carphone Warehouse outlets, includes unlimited web-browsing and Wi-Fi for the first year.

After that customers will pay £10 a month.

O2 has exclusive rights to the Apple handset, and the pay-as-you-go version is available on any of its prepaid tariffs, from £10 top-up a month.

This year Apple allowed O2 to offer the iPhone free on contract for the first time.

However, the lowest price is £45 a month over 18 months for the 8 gigabyte handset - equivalent to £810 or alternatively £75 a month for the 16 gigabyte model, setting consumers back £1,350.

via http://www.telegraph.co.uk/digitallife/main.jhtml?xml=/connected/2008/09/02/dliphone102.xml

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