This only applies to iPhones sold in the USA though, and many other countries will offer contract-free and unlocked iPhones for sale. The “no commitment/no contract” price does not mean the iPhone 4 comes unlocked, that just means it is without the two year service agreement from AT&T. The iPhone 4 price goes down dramatically when you do sign onto the two year commitment, at $199 and $299 for the 16GB and 32GB models respectively. Features 3.
The reason the iPhone 4 is so expensive without the two year contract commitment is that it isn’t subsidized by the carrier (in this case, AT&T), so you have to pay the full premium price to get the phone. Support for display of multiple languages and characters simultaneously. 800:1 contrast ratio (typical) 500 cd/m2 max brightness (typical) Fingerprint-resistant oleophobic coating on front and back. Here is the cost chart from AT&T, you can see the price of iPhone 4 without contract in the highlighted “NO COMMITMENT” column on the right hand side. 3.5-inch (diagonal) widescreen Multi-Touch display. Interestingly enough, you can actually still buy the iPhone 3GS without a contract too, but it comes at a cost of $499 which makes the iPhone 4 seem like a much better deal for $100 more considering all the additional new features.
This price data is directly from AT&T and applies to both the White iPhone 4 and the Black iPhone 4.