$50 savings in exchange for a possible scratched/abused phone with less warranty coverage

Apple's iPhone 3G may be the hottest thing since sliced bread in the phone world, but some people are still a little wary of the $199 entry fee plus a minimum $70-per-month service plan for a mandatory two-years.

The quest for a cheaper iPhone is no doubt on many peoples' minds which explains the uproar that crossed media channels when rumors began to spread that Walmart would begin selling iPhones for as little as $99 with a two-year service agreement.

While the sub-$100 iPhone 3G is still nowhere to be found, AT&T is seeking customers who want a lower initial cost of entry for the phone in the form of refurbished units according to CNET. Whereas the current 8GB and 16GB iPhone 3Gs are priced at $199 and $299 respectively, the refurbished models will set you back $149 and $249 respectively.

However, there is a big tradeoff for the $50 savings over a new model -- the refurbished models only carry a 90-day warranty whereas brand new models carry a one-year warranty from the factory.

Considering that the refurbished phones are still tied to the two-year contract, customers must ask themselves if saving $50 over the cost of a two-year contract worth losing nine-months worth of warranty coverage. It seems likely that most will simply just go with a new unit, but stranger things have been known to happen in the Apple world.

"There's no chance that the iPhone is going to get any significant market share. No chance." -- Microsoft CEO Steve Ballmer
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