It was full price no subsidy when it launched. The subsidy wasn't introduced until 2008. The subsidized cost was still $200. Those subsidized phones also weren't actually subsidized when they were introduced. They forced you into a high cost service plan for 2 years, tacked on a termination fee that amortized for the duration of the two years. You were in reality paying off the phone over the duration of the contract and couldn't leave the contract without paying the termination fee, which was functionally paying off the balance of the phone that was "subsidized."
Then they kept the service fee at the higher price whether you got a new phone or not, so you were still paying for a new phone that you didn't actually buy, which induced people to sign a new 2 year agreement with a new termination fee so that people felt like they were actually getting something for their $99/mo service payment.
They got sued for the termination fees and had to change the structure of their contracts so that people were no longer signing two year contracts with termination fees, but rather paying for their phone service plan and then either buying the phone outright or doing a pay as you go plan that amortizes in the same way the old subsidized plans did, but at the end of it your payment falls to the service plan without a contract or you can re-up with a new pay as you go purchase.
It's not that fundamentally different, it's just significantly more transparent now and you're not getting effed if you don't get a new phone every 30 months.
https://www.apple.com/newsroom/2007/06/26AT-T-and-Apple-Announce-Simple-Affordable-Service-Plans-for-iPhone/