AT&T said Thursday it will start selling iPhones without requiring a two-year contract, but they will cost $400 more. The company will sell the phones starting next Thursday for $599 or $699, depending on the storage capacity, The Associated Press reported today. The two models cost $199 or $299 under contract

The new phones will still be "locked" to AT&T and won't work with any other cellular carrier unless they're modified. AT&T will only activate them on the regular iPhone plans, which include a $30 monthly charge for data access. Prepaid service will not be available.