AT&T will begin selling no-contract iPhones next week in the US, but they'll still be locked into AT&T service.

The Associated Press reported today that an AT&T spokesperson has confirmed that the company will being selling the 8GB iPhone 3G for $599 and the 16GB model for $699 - $400 above their contract prices - beginning next Thursday.

The phones, however, will only work with AT&T's service, which will be at its standard iPhone rates. No prepaid plans will be offered.

So what's the point? Plenty - just unlock the little fella, pop in an appropriate SIM card, and you're a free man. Or woman.

Who's four-hundred bucks in the hole. ®

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