[vlad]

1) You had to pay full price and sign up for a two year contract with AT&T when the iPhone first came out.

2) Another fact that supports Ballmer's point that the phones were too expensive is that Apple dropped the price by several hundred dollars a few months after launching it.

So, yes, there were two year contracts, but no smartphone was $0 down or close to it at the time.

[djrogers]

You could get a Blackberry for $99/$199 on contract at the time, and BB was the dominant smartphone manufacturer of the day. It was obvious to most that the model you outline in #1 could change at any time, and most people figured it had to change...