Cost to replace a lost iPhone for an existing AT&T customer.

Anyone know what the cost to replace a lost iPhone for an existing AT&T customer under contract?

Sorry, Glor, you are correct - right numbers, wrong terminology. In fact, I'm not even sure that it possible (yet) to purchase an iPhone at that unsubsidized price in the US.
Thomas, yes, $499 to replace your 16 GB phone. You are correct in that you should try to do that at an AT&T Store, rather than an Apple Store (they have enough difficulties with non-standard activations).

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