AT&T: It's True, Contract-Free iPhone 3G Is Coming To A Store Near You

AT&T Thursday said that it will start selling iPhones without those pesky two-year contracts beginning March 26. The catch? You'll have to pony up hundreds of dollars more.

AT&T spokesman Michael Coe confirmed the news late Thursday.

"The no-commitment pricing offer is available to AT&T customers for $599 [8 GB] and $699 [16 GB]," Cole said.

Translation: You'll be paying either $200 more for the 8-GB model or $400 more for the 16-GB iPhone.

The buzz about the no-contract bonanza began earlier in the day after Web site Boy Genius posted pictures from an AT&T presentation.

The company's presentation noted that customers buying the iPhone 3G under the no-commit price are not required to activate the phone at the point of sale -- store -- which is usually the case. The no-commit price also is limited to one-per mobile number.

AT&T also is restricting the no-commit pricing to existing customers who want to add a line, buy a gift or perform an upgrade, and are not eligible for the qualified or early upgrade price.

It's also important to note that even though you are no longer tethered to a two-year contract, your phones will still be locked to AT&T, and won't work on other cell networks.

On Tuesday, Apple showed off new iPhone 3.0 software with 100 new features at a press conference. According to Reuters, an early version of the software was made immediately available to application developers, while consumers will be able to get their hands on it sometime this summer.

The software upgrade is free to iPhone users, but iPod touch users will have to pay $9.95. Developers will find more than 1,000 new programming features in the new software kit, such as peer-to-peer capability.