What happens after the 2 year contract ?

One Apple a Day wrote:
can we get the phone unlocked ?

No. AT&T will not do this

if we can not get the phone un locked why 2 years contract then ?

Because thats just the length of the contract.

This is a good question for AT&T.

A 2 year contract was required for the first generation iPhone even though the first generation iPhone was not subsidized by AT&T in the traditional way. Since the first generation iPhone was not subsidized by AT&T in the traditional way, this means you qualified for upgrade or subsidized pricing on any new phone at any time during the contract period, and you could have done so without a penalty for not fulfilling your existing contract for the first generation iPhone because it was not subsidized by AT&T.

The required contract term and if AT&T will unlock a carrier locked phone are not related to each other. AT&T has unlocked some carrier locked phones for subscribers when requested during the contract term, or when the contract expires, but AT&T is not obligated to do so by U.S. law.

<<<Since the first generation iPhone was not subsidized by AT&T in the traditional way, this means you qualified for upgrade or subsidized pricing on any new phone at any time during the contract period, and you could have done so without a penalty for not fulfilling your existing contract for the first generation iPhone because it was not subsidized by AT&T.>>>>

It means no such thing!

The original iPhone can be used as an iPod touch--details:
http://support.apple.com/kb/HT3406

Yes, it does. Anyone who bought an Original iPhone could upgrade at the subsidized prices when the 3G came out.

It did in my case when I purchased an iPhone 3G at AT&T's subsidized price a little over a year into my existing 2 year contract for the first generation iPhone with no penalty.

And I became an AT&T subscriber 3-4 months before the first generation iPhone was released signing a 2 year contract for a subsidized phone. 3-4 months later, I purchased the first generation iPhone signing a new 2 year contract for the first generation iPhone with no penalty for not fulfilling my existing 2 year contract at that time for the subsidized phone I got 3-4 months before and which I still have.

Now what such thing does this mean?

No. If you buy the 3G at the subsidized price, you are required to extend your contract 2 more years. They have announced that starting sometime next week, you will be able to buy an unsubsidized price for $599/$699 without a contract.

I assume that you mean Original iPhone rather than 2nd gen. The 2nd generation iPhone is the 3G.

If you buy the 3G, you will start a new 2 year contract.

It sounds like he started with AT&T with a subsidized non-iphone. He was then able to upgrade to the first iphone because it was not subsidized and started a new 2 year contract. And because his first iphone was not subsidized, he was able to upgrade to the 3G iphone and started another 2 year contract from that point.

At the present time, a two year contract is required when purchasing the iPhone 3G regardless if you purchase the iPhone 3G at AT&T's subsidized price or at the full non-subsidized price. Activation with AT&T and a new two year contract is required at the store when the iPhone 3G is purchased.

Correct.