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I have AT&T service but it is to a Blackberry due to my job.
My wife has a camera phone. She has held and played with an iphone and thinks they are cool but she is totally lost with high tech gadgets so it would be no use to her.
If at some point they come down in price to under $300 and I have about ten other things in priority ahead of it then I would probably get her one so I can play with it!!!
I have heard that it's downside is that the battery will only recharge a few hundred times then you have to replace it and it is very expensive.
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