The lowdown on iPhone pricing

New AT&T customers who pass a credit check know what they will pay for a new iPhone: $99 for an 8 GB iPhone 3G, $199 for a 16 GB iPhone 3GS, and $299 for a 32 GB iPhone 3GS.

AT&T also charges a $36 activation fee. The firm requires a two-year contract, and a pretax minimum $40 voice plan, along with a $30 data plan. Text messages are not included in these minimum monthly fees.

If you're an existing iPhone owner, the pricing gets more complicated. Subscribers who are still within a two-year contract may be eligible for the prices cited above. AT&T subsidizes handsets, absorbing the difference between what a handset maker like Apple charges it, and what the firm passes along to a subscriber. With iPhones, that difference is believed to be from $200 to $400.

AT&T recoups its subsidy from you as part of its monthly service fees, which also must pay for the capital and operating costs of its network, and (shareholders insist) produce a profit, too.

Last week, AT&T said that customers who paid at least $99 per month per line would be allowed to get an iPhone at the cheapest price 12 to 18 months into their contract term.

The company also said it would accelerate eligibility to June 18 for customers who would qualify in July, August, or September. All earlier iPhone 3G owners aren't yet 12 months into a contract, so this change could affect a million or more of them.

If AT&T's analysis shows that you haven't paid them as much money yet as the company would like, you can typically pay an extra $200 ($299, $399 or $499) and exit your current contract, keep your current (inactive) phone, and get a new iPhone 3G or 3GS, along with a new two-year contract.

AT&T charges $499, $599 and $699 for the three iPhone models without subsidy, but that's in part to discourage purchases in which the phone is unlocked and sold typically into foreign markets that don't yet offer an iPhone on a domestic carrier, such as China. AT&T subscribers with unsubsidized phones pay the same monthly rates as other customers.