AT&T And The iPhone Upgrade

[Jeff Campbell]

<div class='os_post_top_link'><a href='http://www.appleinsider.com/articles/09/06/08/iphone_3g_users_to_pay_200_premium_for_early_upgrade_to_iphone_3g_s.html' target='_blank'>http://www.appleinsider.com/article...phone_3g_s.html</a><br /><br /></div><p><em>"During its presentation at WWDC Monday, Apple highlighted new pricing for the iPhone 3G and the upcoming iPhone 3G S model but didn't explain that existing iPhone 3G customers will have to pay a $200 premium to upgrade to the latest model if they want one right away."</em></p><p><em><img src="http://images.thoughtsmedia.com/resizer/thumbs/size/600/at/auto/1244594411.usr105634.jpg" /></em></p><p>This has caused quite a ruckus all over the net. Differing opinions are being thrown out there, ranging from "too bad, you knew what you were getting into when you agreed to the 2-year contract" to "AT&amp;T is gouging us!" I won't go to the gouging extreme, since they will supposedly allow you to upgrade at the 18-month mark, however the last time I upgraded it was at the one year mark so I'm a little perturbed at 18-months to be honest. I really want to test out the video of this new iPhone but I haven't decided yet if it is worth the $200.00 USD premium, what do you think?</p><p>If you are curious if you qualify for the upgrade, head on over to <a href="http://buyiphone.apple.com/" target="_blank">Apple</a>, and they can tell you when you will be eligible, just don't break the screen when your information pops up!&nbsp;</p>

[jdmichal]

Sorry, I'm with the "You knew what you were getting into" group. The only reason that iPhone cost you $200 instead of $600 was because of that two year contract you signed, where AT&T makes up the $400 rebate they just gave you. You were perfectly free to pay that $400 yourself in order to avoid the contract, as stated very clearly in the article.

[doogald]

As I said in another post, I think that when you sign a two year contract to buy a subsidized phone you really need to get your head around the fact that it'll be around two years before you can upgrade.

That said, what I'd suggest is that, as good as the 3GS may look to you now, there will be a better upgrade available in 2010 that people buying now will not be able to upgrade to but that you will be able to.

[Jeff Campbell]

Oh I understand it, that's why I'm not in the "gouging" crowd. :)

[Dyvim]

I'm with the "you knew what you were getting into" group.

On another forum, people are hypothesizing that the time-to-upgrade depends on your average monthly phone bill. Those with (single) iPhone bills > $100 are eligible for upgrade after 12 months (there are many iPhone 3G owners on other forums that will be eligibile in July after just 12 months), just below that amount and you are eligible after 17 months. In my case, my iPhone bill is only $40 since it's a 2nd line on the cheapest family plan and no text, so I'm eligible after 20 months!

I think I'll be paying the $200 premium as I seriously want 32 GB of storage, more RAM, faster processor, better camera, and video.

In 2005 I paid almost $600 to upgrade my Toshiba e800 PocketPC to a Toshiba e830 PocketPC after just 9 months (to get just a faster processor + BT) and was very happy with the deal (best PocketPC I ever had). $500 in 2009 $$ for a 32 GB iPhone 3GS doesn't seem so bad in comparison (although the real cost of ownership is in the montly bill, but I'm already paying that for my iPhone 3G).

EDIT: In Feb 2008 I paid $500 to get a 16 GB original iPhone (when the new larger capacity debuted), after just 3 months with an 8 GB iPhone, so $500 in June 2009 for a 32 GB iPhone 3GS also seems ok in comparison. What can I say? I'm a tech junkie - that's why I'm here.

[ianbjor]

I agree - the whining is crazy. It's not like phone subsidies are anything new.

Regardless, there are some absurdities (prices below are 32gb):

Contract-free service = $699.
However, You could sign up for new service -- and get a phone for $299. 2 days later, pay the $175 early termination fee (ETF), and you've got the phone, contract-free, for $474. That doesn't make sense.

Similarly - I qualify for $499 upgrade price. Yet I could sign up for a new line of service and get the new phone for $299 and pay the $125 pro-rated ETF on my existing contract...


Finally: If I am willing to pay $699 for a contract-free iPhone, why is it still sim-locked to AT&T?

[gmontielh]

Sorry, I'm with the "You knew what you were getting into" group. The only reason that iPhone cost you $200 instead of $600 was because of that two year contract you signed, where AT&T makes up the $400 rebate they just gave you. You were perfectly free to pay that $400 yourself in order to avoid the contract, as stated very clearly in the article.

Not quite agree... with the 2G data service is $20 with 200 messages included. With the 3G is $15 more per month which translates to $360 more over a 2 year contract. Subsidy?? I believe that it was "pay me now or pay me later" as most people were complaining about how expensive the phone was but not really a subsidized phone. That makes the then 8GB 3G total $559. With early cancellation plus new contract for the 32GB 3Gs we could say coming ahead $85 ($185 with the 16GB). Besides the fact that there is still an aftermarket for your "old" 3G...

[jdmichal]

Not quite agree... with the 2G data service is $20 with 200 messages included. With the 3G is $15 more per month which translates to $360 more over a 2 year contract. Subsidy?? I believe that it was "pay me now or pay me later" as most people were complaining about how expensive the phone was but not really a subsidized phone. That makes the then 8GB 3G total $559. With early cancellation plus new contract for the 32GB 3Gs we could say coming ahead $85 ($185 with the 16GB). Besides the fact that there is still an aftermarket for your "old" 3G...

I'm confused as to why you disagree with me. You have just perfectly proved my point. AT&T is NOT going to give you that $400 for free. The first iPhones were not subsidized, the second were. I don't consider it a coincidence that that's almost exactly how much the data plan price increased over a two-year period.

I think AT&T pushed against Apple for that for two reasons. First, it makes the iPhone data plan the same price as their other data plans. Second, it makes them more money, because they do not drop the price after you're done repaying your subsidy. Apple agreed because it drops the upfront sticker-shock price, leading to higher sales volumes, even though people end up paying just as much in the end.

[Fritzly]

Sorry, I'm with the "You knew what you were getting into" group. The only reason that iPhone cost you $200 instead of $600 was because of that two year contract you signed, where AT&T makes up the $400 rebate they just gave you. You were perfectly free to pay that $400 yourself in order to avoid the contract, as stated very clearly in the article.

Correct me if I am wrong but here in the US eben if you paid $600 you still receive an iPhone SIM locked to AT&T; the one I bought in Europe for Euro500 was SIM free and I am using with T-Mobile.
While I personalli do not like and I do not buy so called "subsidized" phones AT&T attempt to sell for $600 a still SIM locked phone is a clear example of who our so called "representatives" really represent.

[jdmichal]

Correct me if I am wrong but here in the US eben if you paid $600 you still receive an iPhone SIM locked to AT&T; the one I bought in Europe for Euro500 was SIM free and I am using with T-Mobile.
While I personalli do not like and I do not buy so called "subsidized" phones AT&T attempt to sell for $600 a still SIM locked phone is a clear example of who our so called "representatives" really represent.

Yes. Every phone sold in the United States by a carrier will be SIM-locked to that carrier. I have never heard of any exceptions. (I have no idea if there's an equivalent mechanism for CDMA, nor how it works if there is.) Usually, they can be convinced to unlock your phone, but AT&T has explicitly stated that they will not unlock an iPhone. This is of course another factor of the whole subsidy practice, as you pointed out. The fact that it's still done for phones bought without subsidy is the same reason as why they don't give you a discount on your monthly service when you buy without subsidy.

Just for the record, matters such as this are exactly why I do not own an iPhone. Apple is monopolistic and draconian enough for my tastes as it is; I do not exactly relish throwing AT&T into the mix also.

There is a DCMA exception that states that a phone may be modified in any way necessary in order to let it function on any carrier network. (The fact that there has to be an exception for such a thing is a failure of the legal system, as far as I'm concerned.) But that is the only thing in the books speaking to this. A carrier is not legally obliged to unlock your phone for you.

And I'm not exactly sure what you mean by a clear example of what our representatives represent... But it sounds like a political allusion, so I'll just pretend like it didn't happen, because I really do not want to get into politics.