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iPhone 3G + Cancellation Cheaper than Un-Contracted iPhone 3G

I'll admit that when I saw the prices for the iPhone 3G sans contract ($599 for the 8gig and $699 for the 16gig), I was disheartened. It turns out these prices are a actually more surreal than they appear at first blush. Gizmodo did some math and figured out the following: it is cheaper to just buy an iPhone 3G and sign up for the contract, pay the activation fee, then cancel the contract immediately and pay the early termination fee. Check it out:

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