A SIM card is still required to activate the i Phone (first boot), but afterwards if you remove the SIM card you can still use your i Phone: This document, titled "Using an i Phone without a SIM card - What are the features available?
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There's a feature that debuted in i OS 7 that lets you to save your credit or debit card information in Safari so that you can auto-fill text boxes when purchasing something online.
Unfortunately, you still had to manually fill in your card info the first time, and if you wanted to disable the feature for security concerns, it was entirely useless.
This probably sounds like a sketchy idea, but it's actually quite legit - you often need a "valid" credit card number to test out payment functionality.
After the scan, the payment form in Safari will be automatically filled in with your card's number, expiration date and your name.
Whenever you're in a payment page in Safari that needs to be filled out, tap one of the text boxes where your credit or debit card info goes.
Even without a credit card attached to the Apple ID, you can add gift certificates and redeem codes through this account, making for an easy budgeting system should you wish to provide limited access to App Store purchases down the road.
Now log into the App Store with the newly created Apple ID and the user will be able to download any free apps or download updates to existing apps.