The wireless operator will start selling the 8GB and 16GB iPhone to current subscribers for $599 and $699, respectively, without requiring them to sign a two-year contract or activate the device at the point of sale.
AT&T, however, will continue to require customers to sign up for an iPhone data plan if the phone is activated on its network. The carrier plans to limit sales of no-commitment-priced iPhone 3Gs to one per customer, according to the report.
AT&T did not respond to a media inquiry Thursday about the report of no-contract iPhone in the pipeline. Following Apple's announcement of a new iPhone operating system due out this summer, the report is likely to increase speculation that an upgraded version of the device will be unveiled later this year.--Mark Walsh