Something I had been hoping for since the original iPhone was announced is that there would be no contracts. Contracts are these slimy things that mobile service carriers tack on in exchange for a reduced cost on the phone and guaranteed recurring monthly revenue (RMR) in the place of guaranteed good service. At least that's how I see it. There is sufficient telecom lobbyist money lining the pockets of Washington Congressionals to ensure that the penalties for breaching a mobile phone contract in areas with sparse service still seem daunting enough to keep the average Joe from understanding thier rights, anyway.
Announced this week, UK eTailer Play.com is offering the unlocked iPhone 3G 8GB and iPhone 3G 16GB for £549.99 and £599.99 respectively. There is no service or SIM Card associated with the phone. You simply transfer the sim card from your current GSM/GPRS/EDGE/HSPA phone and off you go. Depending on the plan associated with your SIM Card and your carrier plan, you need to get a better data plan, have limited or no access to HSPA (3G) networks, or suffer a hefty data access bill. Still, this is a step forward.
Additionally, AT&T will start selling the same phone in the US unlocked. For AT&T, this is a leap of faith that the market will accept having to pay the higher price in exchange for the freedom of switching carriers at will. I consider it a leap forward even though it probably is just a marketing gimick to dump old stock before the new iPhone drops on the market.
Ideally, US carriers should separate phone purchases from plans. Over time, the market would correct for having the high price of phones. (See Seth Godin's blog on pricing as a signaling tool.) So carriers can focus on managing networks, Content providers can focus on creating and selling differentiated and compelling content (e.g. ringtones, songs, video, web, etc.), and mobile device manufacturors will be able to sell thier phones at a profit that the market will bare instead at the artificial price controlled by an oligopoly.
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"[A] wise and frugal government... shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government."
