There has been plenty of ink spilled over the 3G S upgrade (“Now faster with oleoresistant skin!”) and it’s abundantly clear what folks are trying to do here. Early adopters have always chafed at having to pay outrageous fees for upgrades inside of a contract period. Be it the latest RAZR a few years ago or the latest iPhone today, the same obsessives who are ranting about iPhone upgrade pricing were trying this same trick years ago – but now they have some leverage.
All said and done you’ll probably pay $499 for the new iPhone if you’re in contract and you’ve been a good AT&T customer. Not too shabby if you’re the kind of person who needs to upgrade. But the folks making the biggest noise are aiming to change the upgrade paradigm here. They’re calling and threatening to switch the the Pre. They’re filing petitions. They’re ranting on Twitter. Poor AT&T – if such a phrase should ever be said of a carrier – will have to react and they’ll probably react by creating an early adopter precedent and creating a special price for people who are calling to whine. General outrage and excoriation are useful tools for the consumer troll.
Will the upgrade pricing situation change for the 3G S2 or the 3G S++ or whatever the next iteration will be called? Absolutely not. AT&T has a good thing going here. But look for class action lawsuits and faux-outrage to come. This is just the beginning, especially if Apple and AT&T continue using low prices as bait… as carriers for time immemorial have done.
On the other hand, carriers and handset vendors have brought a great deal of this upon themselves. They advertise “$99 iPhone 3G” handsets and “$199 iPhone 3GS units” — and heavily advertise those prices to get the price point embedded in user and customer psyches. Then, when existing customers go to get that pricing, they feel “baited and switched.”
Clearly the advertised pricing strategies have a customer upside — lots of iPhone acolytes argue in favor of the 3G unit against competing Pres and G1s based on the fully-subsidized price (ignoring any differential in service costs). And many customers are swayed by it.
But the dark side of that bargain is that EXISTING customers see that pricing too. And they feel cheated if they cannot get it, rightly so or otherwise.
my point is you pays your money you gets your phone. We all were subsidized when we switched and we signed a contract – a contract specifically designed to prevent what most customers feel is their birthright. I don’t agree with the behavior and i needs to change but it will be a hard row to hoe.
Are AT&T really being “evil”?
They discounted an expensive phone on the basis of the customer paying a monthly fee for 2 years. Why should the customer expect to dodge their part of the deal?
Further evidence that we live in the Age of Entitlement!
Yes, yes they are being “evil”. If a company can afford to sell a product at $99 with a two year contract in order to get a potential new customer to leave their competition in the dust and paying that company ~$100/month, but cannot afford to sell that exact product at $99 to an existing customer with a two year contract extension, and that existing customer is already lining their coffers on a ~$100/month basis, I’d call that evil.
No, I’d call that stupid. A technology product in itself is no longer good enough, in this period of innovation, to base a system of customer loyalty upon when the contract period is an eternal two years long. Stupid.
The way I see it is as if the IRS were to begin extending ’special offers’ and incentives and 80% discounts to people who’ve never paid them taxes before, and at the same time telling all the existing taxpayers that they don’t get any more refunds, breaks, tax writoffs, or incentive programs. Just continue paying your taxes existing customers, just like you always have been.
Stupid customer service model. Evil business ethics.
I paid full price for an iPhone Gen 1 and i still got stuck with 2 yr contract. I’m all for paying a full price of the phone, but if i do, i dont want to get hit with a 2 yr contract… eliminate the contracts if ppl are willing to pay full price. I’ve only bought unsubsidized phones… in either case, the math works out to be the same!!!
If we could have AT&T adopt the contract policies of our European counterparts this would not be an issue.
Most of their contracts are for one year (typically the same time for a new version of phone to enter the market…3G and now 3GS a year later). The subsidized cost may be greater but existing customers feel they at least are on a level playing field with new customers.
The stranglehold they have is the exclusivity of the iPhone to AT&T (I do not want a jailbroken phone).
Now the free incoming calls (and some carriers offering free European roaming) is a whole issue unto itself. In short, the system stateside sucks!
The argument that you signed a 2-yr contract because the phone was subsidized is lame.
Why?
Because there’s no way for me to go to AT&T, get a new iPhone for the upgrade price, and extend my contract another 2-yrs beyond the current end date. If AT&T made that option available, there’d be less ground for those that are bitching about this to stand on.
As it is, they perpetuate the ill-will they rightly garner from users having to pay high prices for a great device hamstrung by shoddy service.
This is America, capitalism reign, not socialism. AT & T DO NOT have any obligation to follow small group of customers compare to all to set their pricing. If these customer use their phone for more than 1 year and demand refund, What is the meaning of contract. What is the cost of reserch into the NEW iphone. You have freewill not to sign any contract, are you addicted and must use iphone 1 year ago. I DO NOT. I am a NEW potential customer, of course AT & T want to get me hooked for $99 or $199. Man you already enjoy your uitility( As Economist say it). This is a free world, if people use the press or words to PUSH enterprises to do what they want, then it is purely politics, not economics that govern our business world. Come on, GO to China, and see what life you will have? You can get clone iphone for less than $99. You get everything you want at “pirates” prices, is that what Americans want??
Warren Pattison –
Your argument is lame. Their argument is fine.
Let’s say you’re a car dealership and I come to you wanting to buy a $10,000 car. I offer to pay $500/month for 24 months to pay off the car (plus interest).
Now, fast forward 12 months, a new model of that car comes out. I come back to you and say, “Hey, that new model came out, why don’t you give me the new one, I keep the old one, and agree to ‘renew’ my contract for 2 years, starting today. I’ll just keep giving you $500 a month!”
It’d be stupid for you to take that deal. You’d give me $20,000 worth of cars for $18,000. Not only would you not get the interest I owe you, but you wouldn’t even be getting what you expected to sell the cars for! You’re out $6,000!
When you get a subsidized phone, essentially you’re getting a sort of financing. It’s not explicitly laid out, but that’s how the phone company treats it.
Let’s say you get a $500 phone for $300 with a 2 year contract. Essentially, that extra $200 is a loan you’re paying back over 2 years as part of your service agreement. But if you leave the company after 1 year, you have only paid back half that “loan.” You still owe the company $100. Therefore, the company makes up for that by charging you an early termination fee. That ETF covers the $100 you still owe and life goes on.
If you got a $600 iPhone for $300, it’s stupid for AT&T to turn around and say, “Hey, I know you still owe me $150 on that iPhone you got a year ago, but since a new one came out, we’re going to just write off that $150 for no reason!”
The reason origional iPhone users got subsidized 3Gs was because the first gen iPhones were not subsidized. So those people weren’t still repaying their “loans.” Since the 3G WAS subsidized, it makes no sense for AT&T to just give away free money to people who haven’t finished their first commitment.
Of course, I should also note that the origional iPhone users DID sign a contract. AT&T did the right thing when it came to giving them a subsidized 3G, but they certainly didn’t have to. Stop whining.
Totally agree Jason. However, I feel this situation (and AT&T’s crappy service) exists because there isn’t enough competition to force the carriers to compete against each other on service and price.
And squeaky wheels get the oil… ;-)
Yes, I agree to a point. The issue is the fact that Apple has gotten on to this yearly cycle of phone releases. They should know this is coming. Most other manufacturers do not fall into this category. Apple has rabid and loyal fans who love their products and this is an example of us being penalized for being one of those fans. Dont make the contracts 2 years if they know the new hardware cycle is every year.
I bought the first gen iPhone and then a 3G because I love the products. I want a 3GS, dont penalize me for buying your product.
This is it exacly. Who would have know a new iPhone would come out a year later, every single year… My only gripes is this: although the 3G version has enough processing power to do the Voice Control, we’re not getting it. Why? Because they want us to pay for the same phone, again. Sure the 3G S has like 200 more MHZ and double the ram, but it’s the same phone. I shouldn’t be penalised and not receive the upgrade. I know where getting the free upgrade to copy and paste, but that shit should have been in there in the begining. LAME.
John,
You are dead wrong. The fact is that the Carriers (all of them) lock you into a contract when you buy the phone and when you make changes to your plan. Case in point, I bought my iPhone and had the regular data plan. A few months later, I needed to change the data plan so that I can access an exchange server and got locked into an additional two years. No hardware changes, simply a plan change.
The fact that all carriers do it does not make it right. The same goes for the 3GS.
AT&T does not want someone like me who just upgraded to the 3G last year to get the 3GS. What they are looking for are all of the people who bought the Original iPhone whose contract is now almost done and have a choice about getting other phones such as the Pre. Also, they want people who bought BlackBerry devices a couple of years ago (exactly when sales went up for the BB) and are now able to get out of their existing carriers and switch to the iPhone. This way, they get to keep customers who might otherwise switch and get new customers who want the iPhone but were in a contract with a different carrier up to now.
I represent to them the same account at the same rate. Meaning, I represent for them no gain whereas the other customers that I described above represent new customers and keeping customers.
The funny thing is that due to the fact that I changed my plan recently, I can not upgrade at the 199 price until 01/2011 even though the phone will be 3 years old by then.
No one is expecting anything, but the reality is that the carriers are making a lot of money from the data plans and that is while they limit them. the iPhone is good comparing to the BB where access to BES servers will cost you an additional $60/month on just about all carriers.
No Jim, you are dead wrong. Sprint hasn’t done this for a while now, and If I’m not mistaken other carriers in the US have stopped this also. Sprint “used to” make you extend your contract just for a simple service change, and they would also try to extend your contract just for buying a new phone (full price) either from a sprint dealer or even off eBay. But if you know the rules you can avoid that one, just tell them no!
I feel if you’re going to try to make a valid point at least get your facts straight.
Now on to the matter at hand, AT&T is not doing anything wrong. There is no reason for them to let you get the discounted price as a current customer, because you are the one who agreed to take a large cut off the price of the phone, and sign the two year contract.
Someone above said they have no problem buying a phone outright, but they still got stuck in a 2 year contract, I don’t know how it works at AT&T but when I was working for a Cingular dealer, we had the option to sign up service with no contract. Granted we were told to try to get them to go with a contract if at all possible.
I also worked for Sprint and we could give out non contracted service to customers who paid full price for a phone. Now granted at both Cingular and sprint we didn’t get paid any commissions for non-contractual services, but it was possible.
If you’re going to go buy something, don’t give in just because the sales person makes you “think” it’s the only way. And avoid going to best buys or other independent cellular dealers. Going to a company owned cellular store is ALWAYS best. And you can’t always trust the stores branding on the building, the Cingular store I worked at LOOKED super nice, and could have been a company owned store, but we were just an independent dealer.
Right on. The $199 is a 2-year-subsidized price. If you bought your phone last year, don’t bitch and moan about having to pay higher for the new 3GS.
I’ll love the look on those iPhone 3G suckers when I replace my Gen1 iPhone and get the new 3GS this month. Hahaha!
More fine print and footnotes are not what consumers look forward to weeding through.
I would have no issue if AT&T simply extended my existing contract an additional year (wha remains on my current contract) with this upgrade and make it a 3 year contract.
However, if they start doing it, users will upgrade every year and will end up with 5-6 years contract and the same termination fees. It is not logical from carrier’s perspective.
The better solution is sell your 3G for $150-$200 which will compensate for the additional upgrade price to be fair for both sides.
How exactly will you sell your used 3G for $150-200 when AT&T is selling new ones for $99?
If they simply extend it by a year, they’d only getting 3/4 of the reimbursement time for the 2 subsidized phones they sold you. The subsidies are based on 2 year contracts, so you’d need to bank 2 years for EACH phone.
Now if you don’t mind your contract being extended 2 years BEYOND when your current contract expires (so 3 years from NOW) then they’d recoup the costs and it’d work out. But again, you may very well end up with a 10+ year contract if this is what you expect every year…
the problem with that is, you haven’t finished paying for your old phone yet. Sure, signing a new 2 year contract will pay for your 3GS, but what about the year of subsidies AT&T is losing out on your old phone?
Most people who buy a phone don’t know that they are being subsidized at all. They just know what they see on the price tag. Now, like Brian said, they see a new iPhone and a $199 price tag and want it for that price not the $499 price that they would have to pay.
I’m missing the “baiting and switching” and the fine print and the evil of AT&T.
Could you make it anymore clear that you need to sign a 2 year contract to get the phone?
http://images49.fotki.com/v1510/photos/8/1023118/7205752/2year-vi.jpg
The “baiting and switching” is where they don’t indicate off the bat that that pricing & contractual option is only available to non-customers or off-contract customers.
How does this affect Go -Phone user? I’m on a Pre-paid plan with Gen 1 phone.
I bought my phone at full price
Newsflash… you get a $700 phone for $300, you’re going to end up paying for it at some point. AT&T is simply taking a bit of that “outrageous” $30 data plan, voice plan, and SMS charges to make up the $400 they paid Apple to get your business. That’s how it works.
But i do agree that the price ads are deceiving. Companies should be forced into putting all the price tiers on the ads. But, “$699 no-contract, $499 for early upgraders, $399 for eligible upgraders and $299 for new subscribers with a 2 year agreement” doesn’t have the same ring to it.
That being said, I ordered mine from Apple yesterday. For $499.
If an existing customer of a provider thinks that an advertised price is the retail price of a phone, then that customer is a moron. Already having purchased a discounted phone and signed into a contract, they should know better. Its shameful the entitlement that existing customers think they should have. As a good paying customer and a long time upgrader at that, I’m disgusted at these people who want want want and think its all going to come for free.
The thing is cable companies, satelite companies do this all the time… you only get the special if you are a new customer… while cable companies ahve somewhat wised up and give people complaining at times the same deal or close to it. But it is the same old marketing ploy cheap up front more expensive later… Even if loyal customer which in reality shouldn’t it be atleast Equal… i know i know you want the deal to pull in the new customer but is a new customer worth that much more than a paying existing customer?
Yes. A new customer is a NEW customer. New revenue. They already have the existing customer in a contract.
In addition to what Brian said, they already dug themselves in a great big hole when they allowed for existing iPhone customers to upgrade to the 3g at the advertised prices when it was first released. Now customers are expecting the same type of commitment from ATT. I know I was but only because it was done before.
AT&T didn’t dig a hole. Customers didn’t totally understand what was going on. People who bought the original iPhone got it at an unsubsidized price. So when it was time to purchase the iPhone 3G it didn’t hurt AT&T’s pockets to sell you to it for the low price. Albeit you were still in a 2 year contract but since it costs AT&T nothing they were happy to sell you the the 3G for $199/$299.
I completly agree but you have to take that into consideration when you do something like that in the first place. Consumers generally have no idea what is actually going on with profits related to the products they are purchasing. How can you? It’s propriatary information that the company doesn’t want to divulge. Ultimately, this uproar is a positive problem for ATT. People want this product so incredibly badly that they are willing to fight for a price that they can afford.
Soooo…you’re telling me they’ll break their AT&T contract, pay the contract breakage fee, and then buy a Pre? At that point, aren’t they better off just upgrading their iPhone? It’s really silly. I wish everyone who claimed they were going to switch to a Pre were legally forced to do so.
@ Scott – no. do your math.
Existing customers would be foolish to upgrade. It is cheaper to get out of the contract ($140…I did it) and evaluate all vendors. If they decide on the iPhone Gs they sign up as a new customer (I would assume)…cheaper than the upgrade price.
There is something wrong about the pricing model…I doubt this is the behavior AT&T is looking to drive
Most people are not going to be willing to part with their phone numbers, so this behavior may be limited to just a small percentage of people.
At that point, you’d be saving $50 or $100 and losing your number. Doesn’t seem worth it.
its very easy to send a text message to all your contacts with your new number..and for those of us who will be buying the 32GB phone it will be worth saving over 200 as well as the satisfaction that will come along with it:)
haha yeah. pretty empty threats if you ask me. Although, I definitely feel their pain.
AT&T early termination Fee is $175 reduced 5$ for each month into the two year contract. Assuming a customer got their Iphone 3G and waited 1 year then canceled they would pay a $115 fee.
$199 + $115 = $314
Still under the $499 upgrade cost by a healthy margin.
Why all the mentions of 399 and 499? They quote me 599 and 699. Sounds like around 300-400 savings to cancel start over.
you can’t port your number to the same carrier you’re porting from..
So your theory only works if you don’t port and AT&T uses a pen and paper to keep track of it’s customers. I think they would catch on to anyone gaming the system.
@Steven,
You’re probably pretty early in your relationship with AT&T. They are quoting me $499 with an upgrade date of July 18th.
The real question for me is whether or not I want to enter into a contract renewal with AT&T with the strong possibility of a Verizon capable phone coming out next year. If the phone is roughly the same price then it may make sense to break contract with AT&T and jump ship, but its still not clear when the network jump will happen and what the VPhone will be.
The real loss for AT&T will be that many in their audience are sooooooooo pissed off at them for various reasons that when the opportunity presents itself to switch, many will.
Another bonus of using Google Voice… you can change your cell phone# at will :-)
Of course AT&T’s response will be to quietly increase the contract cancellation fee to something ridiculous for their indentured **ERR** I mean “loyal” customers.
On my AT&T page it says this at the end of the upgrade info:
You may qualify for a full discount on a standard iPhone upgrade on 07/13/2009
I assume that’s the 1 year anniversary of my iphone 3G. Since it is offering me the $499 price now, I can only assume that means I’ll get the $299 price on that date (although who knows since they give me no useful information.) If this is actually the case, you’d think they’d avoid this PR nightmare caused by the 1 month delay between WWDC and the 3G release last year and just let me do it 1 month earlier.
Of course, the bureaucracy is probably too large to actually figure that out.
It just doesn’t make a whole lot of sense to the consumer that the price is high for those already on-board. I understand the business on the behalf of Apple & AT&T, but shouldn’t their focus be on all customer experiences?
I agree – that’s why I’m saying that if they are really going to give me the $299 price on 7/13, they might as well make me happy and give it to me on 6/19.
Of course since they are so cryptic, I don’t know whether I will get the $299 price on 7/13 or not so I’m torn.
I just called my local store and they said I have to wait until 6/29 to upgrade mine which is only ten days after the new one :-(
Bwaaaahaaaaahaaaaahaaaa. That was funny.
I think their focus is on a compromise of the consumer experience coupled with making money. They aren’t going to go into a money losing position just to keep their customers happy – nor should they.
If they are losing money by letting me buy one month early I’d really be surprised.
They should accelerate the month and make me (and lots of other people) happy customers.
It’s not my fault there is a weird timing gap because of release timing by Apple.
That’s odd, I bought my 3G on release day last year and the AT&T ( and Apple ) site tell me that I’m not eligible until March of next year. I wonder why it tells you next month!?
What I was told by an AT&T rep is that if you have an iPhone 3G you will be eligible for the fully subsidized price for the 3Gs:
12 months from the date you bought the 3G if you had an original iPhone (which would be in July for those that bought it at launch)
18 months from the date you bought the 3G if you did not have the original iPhone (which would be in December for those that bought it at launch)
Can anyone else confirm that is what they are hearing as well?
I have not been told that specifically, but based on the AT&T website’s statement that I “may qualify for a full discount on a standard iPhone upgrade on 07/29/2009″, I believe what the rep said is correct. I had the original (bought around 7-29-07) and now have the 3G. I think I will get fully subsidized pricing on 7-29. And I can certainly wait that long to find out.
And I can confirm the other side of that. My first iPhone was the 3G, purchased near rollout, and AT&T’s website is telling me I may qualify for the full discount on 12/31/2009.
6 month wait – not bad. Long enough to watch the model go through it’s shakedown at the hands of the masses, then pick it up after a round or two of fixes. :)
Wow you mean customers are pissed off because a company that is notorious for not giving a crap about their existing customers won’t give them a price break on a hot new phone..that truly is a shocker.
There is no bait and switch here even mentioning the fact is absurd. Everyone here wants to have their cake and eat it too. AT&T like any other company wants to make as much as it can off their customers and they don’t want to eat the extra cost for customers that are only a few months into a new contract and probably already have a shiny new 3G iPhone that they got at a nice subsidized price.
Actually, I don’t see what the problem is. A lot of ATT customers qualify for an upgrade 12 months into their 2 year contract. My wife did, and her new iPhone 3G S at $199 is now on pre-order. If you haven’t satisfied your basic contract conditions, don’t ask for a bonus.
As for the queue in the store though, f*ck that. Picking it up on June 20 seems like a good idea.
It is bad enough that existing users have to pay unsubsidized prices to upgrade their phone, but they also have to sign a new 2yr. contract.
I get the whole idea of the early adopter stigma, but if I’m paying full price, I shouldn’t have to renew the worst cellular coverage in the US.
There are probably more people with iPhone 3g than with the original iphone, and that means apple and ATT will lose money if people don’t pay to upgrade. Everyone wants to upgrade who wouldn’t, and Apple could take the hit and still end up making a great profit. I think Jobs when he comes back might make the change of 199 and 299 for everyone, and stick it to ATT for not having the network up to par. It amazes the most advanced phone can’t send a picture but a free plastic one can come on. I think this will play out towards the customer.
Apple could take the hit and still end up making a great profit?
Why would they want to take the hit? It makes no sense for them…
“It amazes the most advanced phone can’t send a picture”
I’ve never seen a bigger contradiction is a sentence in a long time.
Hasn’t it always been like this? When you sign a contract, you get a better price on a phone. That’s why I usually upgrade phones whenever that contract ends, there’s generally no other reason why I would sign a contract.
Then, why don’t they just offer to tack 2 years onto your contract if you ugrade early? It’s that simple. There’s no option for that tho and that is just lame customer service. They should be wanting to keep existing customers happy and not just lure in fresh, new ones. Both are important, one no more than the other.
Let the complainers go switch to a Pre. Then they can pay an early termination fee to Sprint when the new Pre comes out and they can’t upgrade to that one for super cheap, too.
Rinse, recycle, and repeat.
The problem is that there are no unlocked phones and that so far nobody sued Apple and AT&T to death for not removing the simlock after two years:
See: http://www.ilounge.com/index.php/articles/comments/the-iphone-upgrade-plan-a-fair-solution-to-a-growing-apple-problem/#comments
This is why companies no longer offer $0 phones (and that’s the official insider reason): customer don’t value a phone that’s free. Few realize when they get a $500 Blackberry for $99 that it’s a $500 phone, NOT a $99 phone.
If customers valued their devices they would have read their contract. Fewer still read.
And yes, everyone got a great deal on signing. After that, you’re buying hardware, not cashing in your birthright.
My problem with it is that the criteria for reduced pricing is extremely vague. I was offered $699 for the 32gig iphone 3GS, when I bought a 3G at launch last year. Many people chimed in that they bought it later than me but they’re offered $499 for the same thing.
What gives?
I don’t mind paying $499 for the upgrade, but $699? *And* a new 2 year commitment? Doesn’t it make much more sense to just continue my current contract instead?
Same here!
But if $699 is the “no-commitment price”, why would you be required to sign a contract for it?
Honestly, I just think some of the reps don’t know what the heck they’re talking about. 95% of iPhone 3G users would be eligible for early upgrade.
Why not create an early adopter program where you actually never actually “buy” the phone. Just lease it for a higher annual cost?
I think I would pay $99 every year to get the next the next gen iPhone mailed to me the day it comes out. Then I just mail back in my old one old phone to AT&T/Apple they refurbish the thing and sell it again or use it for customers that drop there in toilets etc.
However you slice it they need to come up with a program that services their existing customers in the same manner as “NEW” customers. We all know to well that your current customers are your best advocates, sales people and product experts.
I think this might actually be the most reasonable plan I see. Many PC component companies like EVGA, BFG, and others are doing trade-in programs. You shell out money for the first card, keep it for a few months then trade it back for a new card with a slight premium.
And IMO that is where most of these people are getting stuck. You guys think of it in the wrong terms. You want a new phone not taking into consideration the cost of the old phone and that you are now getting two high priced phones at a considerable discount.
I don’t know how long it takes AT&T to recoup the cost of each phone. Is it a few months, a year or the full two yrs?
It doesn’t take the full two years, but it usually takes at least a year. That’s the whole reason the $30 data plan is required — to ensure they can recoup the costs of the subsidy.
Everyone, if you’re going to be mad at a company for outlandish pricing, be mad at Apple. The iPhone only costs $200 to make, and they’re making AT&T pay them $600 for each one — and then AT&T turns around and cuts $400 off the total cost once you’re eligible. Perhaps if Apple didn’t charge so much in the first place, AT&T could have a more flexible pricing plan in place.
I dont know what all the fuss is about. This is standard for any carrier. I just upgraded from a blackberry curve to the G1 and I had to pay full price for the phone, which was about double the price for new customers because I was in the middle of my contract and wasn’t in the upgrade period where I could receive a discount.
So everyone should chill a little bit and learn to just have some patience. Wait until your contract is over, then get your phone that you can’t live without.
That would require maturity, though.
Speaking as someone that’s had the Edge iPhone for two years, I think it’s stupid that anyone would publicly piss and moan about not having the coolest new toy LESS THAN A YEAR after having the shiniest new phone. Apple has upgraded the software beyond my imagination in that time, so I effectively feel like I’ve had several new phones in that timespan. These people are getting a vastly more powerful phone for free in OS 3.0 anyway (cut/paste, stereo bluetooth, search, notifications, etc.).
The Pre looks nice, but I can’t imagine dropping out of the vast ecosystem of iPhone accessories and apps for battery-draining multitasking and a few subtle refinements. These people are all bluffing.
I do agree with you that this point is really moot in the large scheme of things, but since when do people stop concerning themselves with the little things and focus only on the large picture? We all concern ourselves with small stuff in one form or another on a daily basis. Plus, the addiitional RAM & processor speed is really gonna help me do more, faster for my job;-) I’m sure there are others that are going to benefit from the added speed for their business tasks.
My issue is that I still have to sign a 2 year contract even if I pay the unsubsidized price of $499. That is a major departure from the norm.
In the past if you bought a phone for the full retail price, your contract remained unchanged.
If the consumer can’t have it both ways then why should AT&T?
No, the unsubsidized price is probably $599 or $699. Signing a new contract will let you get it at a better price, it’s just not $199.
My issue is that I still have to sign a 2 year contract even if I pay the unsubsidized price of $499. That is a major departure from the norm.
Last I checked, the unsubsidized price is $699.
New customers should not be more important than existing ones. I thought that was Business 101? Word-of-mouth advestising is the best form hands-down and making all these customers pay that little bit more is gonna piss a lot of people off, like it or not. In the long-term, it’s just not a wise strategy.
If you bought a iphone 3G (costing AT&T $400) 6 months ago, and are now mad that AT&T is still willing to fork out another $200 subsidy so you can get the early upgrade, then you need to run your own business so you can understand the concept of making money.
The fact that AT&T will offer $600 in subsidies for signing a 30 month contract is incredible. When you sign a new contract at early upgrade, it’s replacing the current contract you have. You’re not extending it out an additional 2 years.
Verizon would offer the same pricing plans, and if they get the iPhone 2010 and a new one comes 2011, expect people to complain about the same exact thing.
And if you really can’t stand the pricing, check out Rogers in Canada, which offers the same prices for the iPhone with 3 year contracts.
All of this AT&T “noise” detracts from the other important villain here, Apple. Fact is the phone is too expensive in the first place and AT&T is having to put these measures in place to recoup the truckloads of dollars they are having to pay Apple.
Drop the prices on all iPhones a notch, let the exclusivity with AT&T lapse, and “free the iPhone”. Did Apple learn NOTHING from the 1980’s???
Great point Ralph. If Apple doesn’t choose to open the iPhone up to other carriers, in a way, they are repeating their mistake with not licensing the MacOS in the early days.
Apple is a closed company though. Realistically, I don’t see them changing their ways.
Did you type that on your iPhone that has like 30% smartphone market share or on your Mac that has like 7%…I think they will be OK.
Apple has had more than 30% market-share before and lost it…
Have you looked at the price for ANY smartphone today? They are all at LEAST this expensive unsubsidized.
It’s the AT&T exclusivity that reallys sucks IMO tho.
Well said.
Classic drug pusher move. Get the customer addicted and then raise the price. What you gonna’ do, addict? Quit the iPhone cold turkey?
SUCK IT AT&T.
I’d like an iPhone but I have an excellent grandfathered plan. I’ll keep my Sprint Treo and iPod touch for a while longer.
My thoughts exactly… I’ll just hang onto my current iPhone 3G and move-on after my contract expires, next summer.
LOL, that’s so true.
Buying an expensive cell phone is like buying a car. You pay a down payment to get the car and then have a set of monthly payments for a fixed amount of time.
Just like with a car, next year’s model could make your formerly hot car now look old and busted.
This is a fact of life and has been the way of doing business in the cell phone world for years. If people don’t like it, then they can pay full price for their expensive indulgences.
It’s the height of “entitlement culture” to think you perenially deserve a new cell phone for less than half of what it actually costs.
what do they call that again…..
Oh yeah – CONSUMERISM
Compounding the insult for me is the general pricing of the new version in concert with the significant lowering of the 3G’s price. The combination all but eliminates the resale market.
With higher 3GS prices, say $250 & $350, and a maintaining of 3G (or a slight reduction to $150) we 3G owners could easily subsidize the cost of our new phone by selling the old.
AT&T would still get a new customer from the resale, and our contracts could have 2 years added from the date of our 3GS purchase.
I’m guessing that since it didn’t happen this way it was a bit of shrewdness on Apple’s part, and not simply an accident.
As it is, my original iPhone is used in the quest bathroom in place of a basket of magazines. I assume a similar destiny for my 3G.
I totally agree about the new 3G price, I’m prolly gonna keep mine so my daughter can play games on it and watch her fav shows in the car.
The combination all but eliminates the resale market.
Just a silly statement.
What’s your G4 iMac worth now…
Yeah, I just indexed eBay and found iPhone 3G 16 GB selling for well over $300… WTF? Why would they pay that much for a used one when they can get a new one from the Apple Store for $99?
Because if you buy it on Ebay you can activate it on AT&T without a contract. Also most of the ones on Ebay are unlocked and/or jailbroken so for people who don’t know how to do this themselves this is a good way they can pick up an iPhone to use on any GSM carrier.
I think John is on point here. They originally marked down the $400 subsidized over a 2 year contract. Most of us (if you waited in line on the release day) are exactly halfway through our contracts. So, if this thinking holds, we’ve subsidized 1/2 of that $400. So we should get $200 off the new iPhone 3G S, or $499 for the 32Gig. So John is spot on to say that “all said and done you’ll probably pay $499.” That is if he’s talking about the 32Gig.
Note: I’m still pissed they didn’t launch with that rumored flat black model that had been floating around. And I am disappointed they didn’t add inductive charging like the Pre. Bastards.
Why would anyone upgrade their iPhone 3G? All we use it for is phone, text, email, games, and fart apps. My 3G does all those things wonderfully!
well, i dont think it is right. anybody that learns from this experience, should not buy apple products months prior to wwdc events. you are just risking the fact that you are going to hate yourself. i think in the long run this could hurt the two companies. Their sales could drop drastically due to the fact that people will think that new product versions are going to come out and not buy existing inventory. Why should people be penalized for buying items upon another version release? Furthermore, eventually iphone is going to be available through other carriers. At&t is just setting themselves up in terms of people wanting to switch. At least show that you have sympathy for these buyers in one form or another and discoutnt the reg price a little. As for the existing iphone users, I suggest always buying insurance for your iphone, then breaking your iphone when a new version comes out so that insurance gives you a new old iphone. then put it on ebay and sell it as new in the box iphone.. you will get more money selling a new scratchless iphone and you can use that money to buy the new version iphone. At the same time, you will end up screwing at&t. Maybe then, they will give people money to recycle old iphones in exchange for new ones!!
There is no insurance available for the iPhone, FYI.
didnt know that……. guess you cant screw at&t. however, you can still help yourself. insure it through statefarm:
Personal Articles Policy or Personal Articles Floater. Each state varies slightly. Some it can be a stand alone policy (CA), others may require you have a fire policy as well.
If AT&T wants to charge me more for my upgrade, fine. BUT my contract should them remain unchanged. If they want to add another 2 years to my existing contract for the discounted price, that would be fine as well. BUT they may NOT charge me a higher price AND make me extend my contract. That’s just BS.
You tell em. Now sit down and eat your gruel.
It’s funny that all of these iPhone people are finally learning what us cellphone junkies have known foru years.
Phones are freakin’ expensive, and if you want freedom and hotness, you’re going to have to pay full price.
Cellphones are an expensive hobby. If you can’t stomach paying a lot for your toys, you need to find a different hobby.
Why are phones so pricey? Are their margins tied to the RIDICULOUS margins built into selling mobile bandwidth? Why do we sheeple put up with it?
Comparing the iPod Touch and the iPhone 3G (~$250 vs.the ~$450 Apple charges carriers) makes my head spin. Sure the iPhone is more expensive to make….but $200 more? IMO it all comes down to the incredible amount of pure profit in selling bandwidth. Carlos Sims was smart.
It doesn’t really matter why. It is what it is.
Subsidized phones are there so the company makes a ton of profit.
Each person earns so much profit for the company, and once we’ve given the company so much money they give us a ‘free upgrade’.
Which is bullshit.
It’s basically like saying, thanks for paying 1000$ for that shitty 80$ phone we just sold you, hows about we give you another upgrade!? Another cool phone for a cheap price.
That saddles you into paying another 1000$ or more.
If you don’t qualify for an upgrade, odds are you haven’t raked in enough money for the company.
you could always go back to payphones, I mean if you’re so upset about it, stop paying.
Otherwise STFU.
If AT&T really wanted to avoid all this crap…make everyone pay FULL price, but those who signed a 2 year contract, send them a $200 Visa card.
The problem is because they don’t expect anyone to pay full price, they raise the non-commitment price to outrageous prices and then drop it for the commitment price. Then they make you believe it will take a whole 2 years to pay off the full price of the phone. When in fact, the phone companies are making the original price so artificially high, it’s clear you have already paid for it after a few months.
It’s a lot like what is going on with music and movies on p2p networks and the internet. A generation is used to getting things for free, even though it is stealing they don’t look at it that way. When companies like hulu offer free content their is no way they can start charging. When hulu mentions that they are going to start charging everyone gets angry and cries about paying for content.
Look at how Microsoft charges customers $50 / year for xbox live. No one complains because it was always a pay service and they feel it is a good value. If playstation tried to start charging for their online service the internet would be angry and every tech blog would report at how unfair sony is being.
Here’s how the discussion goes in the customer’s mind:
Customer: Hi, I’d like a new phone and line of service.
Telco: OK, the phone is $199 and the service is $99 a month with a two year agreement.
Customer: Why do I need a two year agreement?
Telco: We have to recoup the costs of the phone, which we heavily subsidize.
Customer: Can I buy the phone outright and just go on a month-to-month agreement?
Telco: No.
Customer: Seems pretty inflexible!
Telco: This is the deal we offer, take it or leave it.
Customer: OK, I really want the phone. I agree to the terms. Here’s $199.
Telco: Actually, we need $299 today. You’ll need to mail in this $100 rebate and wait six to eight months.
Customer: What?!? The sign says “$199!”
Telco: Check the fine print here — that’s AFTER the rebate!
Customer: OK, fine… here you go. Sheesh.
Customer (a year later): Hey, that new phone looks really snazzy.
Telco: You’re still in contract, so we cannot sell you a subsidized phone at the advertised price.
Customer: *grumbles* Well, OK, but your competitors are offering THEIR high-spending customers a break. I guess you’ve got me. I’ll pay full price.
Telco: OK. Full price for the handset AND a two year contract extension.
Customer: What?!? You only have the two year contract to recoup the cost of the phone! Now you want to sell me the phone at full price with no subsidy AND lock me in for two more years?!? You’ve changed your story!
Telco: Take it or leave it.
Moral of the story: There’s a reason why mobile phone carriers scrape the bottom of the customer service and customer regard rankings along with government bureaucracies, car dealers and real estate brokerages.
When the customer wants something, it’s “against the rules.” And just when the customer thinks he understands the “rules,” they change them — almost always to his detriment.
You don’t pay FULL price for the handset AND a two year extension. You pay $499. if you don’t want the two year extension, you pay $699. Why is this so hard to understand?
I get it. It is bad and worse…
Wasn’t it two years ago that $499 was the price of an unsubsidized iPhone? Why has the price of this tech gone *up* $200 in two years when the price of pretty much every other piece of tech has gone down? That’s fairly bizarre. I realize it’s “Apple”, but even the price of Apple stuff generally comes down and more features are packed in (laptops, iMacs, etc.) It seems nothing more than direct gouging for the base price of something to have gone up $200.
Faux-outrage? I can assure you my outrage is very genuine.
and yet you’ll still buy the phone won’t ya…
Stop trollin McLovin. You’re nothing but an iPhone hater troll. The point here is shitty customer service and, unfortunately, AT&T is the only carrier with the iPhone right now. So, for all us iPhone lovers, they are hitting us where it hurts — our wallets. Just because you can, doesn’t mean you should and just because you should, surely doesn’t mean you will.
He might be trolling but your doing nothing but bending over and taking it from behind. Listen to you whine and complain about something you can EASILY change, keep blaming AT&T but it was your beloved Apple that keeps giving them the exclusive so it would seem they don’t care about you getting bent over either.
Oh I know, you love the iPhone, well guess what, that love comes with a price, they don’t owe you anything, I’d love a Tesla but I won’t argue about how the company owes me a huge discount on one just because I love the car.
You don’t have to pay a single cent for one, just don’t buy one, if you want one then pay up, THEY get to set the price, not you.
Stop your whining already, none of you are entitled to a new iPhone every year, AT&T doesn’t owe you special pricing with every new version that comes out.
Yeah yeah, you feel mistreated and cheated, then tell them how you feel by leaving and going to another carrier but as long as your hard on for the iPhone remains and you keep feeling like you can’t live without it, they can bend you over in any way they want.
I think the term ‘whining’ may be a bit much. I, personally, don’t expect special pricing, but don’t want to be charged more for being an existing customer. That idea is crazy.
I am not ‘outraged’, not even surprised (remember the price drop of the 1st gen iPhone’s?) iPhone OS 3.0 will be free and a year from now, I’ll go elsewhere.
Agreed. The only the worse than a fanboy is a fanboy that can’t have a new toy. People need to stop crying.
On the other hand, there is a much more important issue that is going completely unnoticed. Now that 1st-gen iPhone contracts are being fullfilled, shouldn’t customers have the right to unlock their phones and use them with other carriers? At the end of their contract the device has been paid for fair-and-square, so a user should have the right to put it on any network they want.
Great point! In the US that is only T-Mobile, right?
Yep. In the U.S. there are only two GSM carriers: AT&T and T-Mobile.
Yes, but some of us Americans actually travel to other countries where we might want to use our phones with a local prepaid SIM card. Which is actually what I do with AT&T even here. I use Pay-As-You-Go and AT&T can shove their 2-year contracts.
x5
Josh, you’re a funny guy comparing an iPhone to a Tesla. Those numbers are not comparable, but I get your inference. My loyalty to Apple and AT&T should not preclude their appreciation of said loyalty. Giving me a discount on my upgrade shouldn’t be an issue if I agree to tack on another 24 months to my contract. Current customers should be equally, if not moreso, important than potential ones. It’s called customer service and doing good business… Any yuppy with half a brain should know to consider long-term consequences, rather than just short-term gain. JMHO though.
ATT won’t even sell you a SIM without a contract. This doesn’t surprise me at all.
Of course, they do. It’s called Pay-As-You-Go. Please do some research before posting idiotic comments.
this is all monopolistic proprietary bullshit. they used to do the same thing with home phones (you had to LEASE them from the phone company). now you can go into a store and buy any phone you want.
how does this paradigm apply to any other consumer product? if you buy a car you don’t have to buy an exclusive service contract, nor are you required to keep the car for a period of time, and you are free to upgrade to another car any time you want.
except for one thing. There was only 1 phone company in the olden times…
The thing is you have a choice, use it…
When you buy a new car you are buying out right, this would be more like leasing a car, which is what buying a subsidized phone is like. You have to sign a contract no matter what, and it doesn’t matter if its AT&T Sprint T-mobile or Verizon they all have the same basic deal.
I don’t get to whine every few months that Intel dishes out a tasty new CPU do I. Or how about every few months when a new GPU is released I can’t complain that the new faster better chip should cost the same as the old, or whine because the cost of mine is now half that of what I paid 6mo’s ago..nope.
High early adopter pricing is the norm in tech, get over it!!
I hate AT&T as much as the next guy, but you either take it or leave it. They aren’t forcing the new phone down your throat. They aren’t suddenly doing something they haven’t done for years. They didn’t suddenly add a clause that says he you signed a contact and sorry but you have to wait to get that shiny new toy.
Sure, the point I’m making with your “leasing a car” analogy is that in the cellphone world at the end of the contract the user has paid the subsidized price (and some) so the phone should be theirs to unlock.
It’s the different treatment of potential and existing customers that is the problem here and the exclusivity of the iPhone to the AT&T network only exacerbates it. There is no reason why they can’t allow existing customers to tack on 24 months to their contracts in order to upgrade early. If you just got your phone 3 months ago, that means they can charge you double cancellation fee, or they have a guaranteed customer for the next nearly 4 years. It’s a win-win. Although some people could find themselves in a decade long contract after a few upgrades, there could be some sort of limit applied by AT&T to ensure that the commitment lengths don’t get too out of hand. They need to find a way to keep people happy, so they stay with AT&T. It’s that simple.
Yes, they have a limit. 2 years. Why should a publicly traded company that you surely own stock in (via funds), have to wait 10 years to book profits? LibertyLady, you are completely out of touch with reality.
I have a Gen 1 iPhone and my 2-year contract is about to expire. Why can’t I get the discount to sign-up for a new 2-year contract? That makes no sense to me. Instead, I’m stuck with the Gen 1 phone because I can’t justify $600 for only a few new/improved features. As soon as another carrier has the iPhone, I’ll just switch to them for the discount. AT&T is stupid.
I am pretty sure you can.
By the way, you may want to get a coat for that cold snowy day in hell.
I have to admit McLovin, the “cold snowy day in hell” remark cracked me up, LOL.
If you have a Gen 1 iPhone then you can get the fully discounted price regardless of where you are in your contract. If someone’s telling you otherwise they’re wrong.
You should be able to get the iPhone 3GS at the announced prices. Call.
cant waite to get my hands on the new iphone
Two thoughts. First, no one’s making a 3G owner upgrade. In fact, OS 3.0 runs on the 3G, and the 2G iPhone. So all of the bitching and moaning is about what? Video capture? Compass?
Second, remind yourself what a 2G and 3G iPhone is worth second-hand. Chances are, a 3G iPhone on eBay (at the right time) will sell for about $300. Now we’re talking about $150 difference to UPGRADE.
Now, what about AT$T. Why is everyone trying to get blood from this turnip? They suck. Period. That’s a group of underachievers. They could have had all of the pricing plans cooked and ready to eat on stage at WWDC. This isn’t the first time they were the last to cross the line, and this won’t be the last.
Video capture, compass, hard drive space, RAM & processor speed. A bigger hard drive is a necessity at this point for some of us (i.e. me). Haha. I’ll end up paying whatever cause my job will float the bill;-) My iPhone enables me to work from ANYWHERE without a bulky and often annoying laptop.
I’m tired of hearing this ‘entitlement’ argument crap. This is NOT entitlement. This is the smashing together of two worlds. Computer company meet cellular company. No one’s crying because we feel we’re ‘entitled’ to a new phone from a cellular company. We’re reacting to the hype and marketing of a computer company.
We’re doing what we’re supposed to do. Go out and buy the latest gadget each year. Laptop, iPod, etc.
A cellular company who makes it’s living off of recurring monthly payments could care less if you get a new phone. They’d be happy if you kept your 1990 flip. They only offer new phones because they have to in order to keep the customer from switching.
Computer company… different story. They have to keep innovating to get you to buy the next same thing even if you don’t really need it.
Don’t friggin blame us for fallling for the computer company’s hype.
Apple and AT&T screwed the pooch on this one. No one thought ahead. Big surprise.
How the heck are you going to be able to sell a #3G iphone on Ebay for 300$ when a brand new one is going for $99? The most I think I can get for this thing is maybe 60$.
Do a completed auctions search, answer the question for yourself. See what the 2G iPhones sell for.
Add to that reality, not everyone wants to buy a contract bound iPhone. Used iPhones are often unlocked and used on alternate networks, out of country, whatever.
Apple’s high resale value has a long tradition.
Whoops, forgot to mention that I’ll offer you double your asking price, $60, for your 3G iPhone if in working condition ;-).
Can you unlock the 3G iPhone? 2G iPhones are high in demand because they get unloacked super easily. Can you do it with 3G? Really, I don’t know.
You got to be kidding me right??
Like some cheese with that whine??
OMG, WTF is this world coming to!!! Last time I checked, if you don’t like it, you don’t have to pay for it. No one is forcing you apple fan boys to overpay for a phone, ipod, imac, i-crap. There is now law that says we all have to own a cell phone. Or for that matter in the constitution???
Grow up folks!!!!!!!!
Some of us have jobs that require a gadget like the iPhone, FYI. The personal entertainment whenever not working is just a bonus.
Caveat Emptor…
Would you prefer to pay $499 (or More) upfront for the privilege of having a month to month contract, and thus freedom to “lock in” to a contract only when you reeeeaaaaally want the newest hardware?
I’m suffering the envy of a wife who will soon be trading in her Jurassic Era Samsung Katana for a NEW iPhone with video capabilities.
But at the end of the day, I’d rather put my own $499 to upgrade into a new HD video camera…
What happened last night? Dude, I’m missing $499 and I have this sweet looking phone in my pocket… What’s this? An AT&T 2year contract receipt. Oh man, my ass hurts…
I would ask AT&T to lower their plan prices. Bring them down to half but only with new contract and 3GS. People won’t cry about upgrades then.
I made the call to skip the 3G for exactly this reason. The increased capabilities weren’t worth the cost of upgrading and the fact that I would lose the ability to subsidize the next phone (based on the guess that the next gen would come out before I was eligible for a subsidy)
When you used the subsidy to get the 3G did you really think it was going to be 2 years before Apple dropped an improved version? I’m sure in a year I’ll be moaning when the next version hits, but it’s all about choosing when to act. My guess is that I’ll skip the next gen and get in on the next next gen, just like I’m doing by moving from Gen 1 to 3GS….
After reading your post, I am going to call up AT&T and see if I can get the 3GS at a subsidized rate. I think I have some leverage with them due to some mistakes they made. Thanks John Biggs!
Lot of comments – lot of people who appear to have never owned a cellphone prior to iPhone. This is nothing new people. If anyone wants to blame anyone – blame APPLE. They saw sales were flat with iPhone and changed the model to subsidized to “lower” the price.
The price is NOT 99, 199 or 299. They should put a big fat * next to it and then list – for new subscribers with 2 year commitment for voice / data plan for X. It’s misleading and I’m sick of hearing how iPhone is now 99 as its not.
Now if everyone has such as issue with this then be my guest and buy the iPhone at full cost. There would be hardly no sales as the carrier plans would still be the SAME. I laugh when people say cut the plans in half etc. Umm what do you think pays for all network buildout? faster speeds? more coverage?
If you don’t like how the wireless industry works – don’t use a cell/smartphone. Stick to landlines and wifi when you can find it. All this wireless spectrum you gladly eat up costs money to buy and that price is broken down to you. Just like cable TV. Last I checked HBO wasn’t free.
The person who compared the PC world to telco is right on. I suppose everyone has free broadband at home? Wireless is a SERVICE that you pay for. If Apple would like they are free to purchase their own bandwidth and start their own telco.
And anyone thinking Verizon will be any different or cheaper? You are truely dreaming. I have used every carrier out there over the years and the cheapest is TMO but they have the smallest coverage footprint.
You will not see any change to this pricing as it would set a precedent that would have to apply to every other mobile device and the carriers are not about to give upgrades away.
Apple I always wanted a new G5 so I’ll just take a loaded one for the price of my G4?
First off, the problem with this “brouhaha” at this point is the lack of a COHERENT argument. Some folks are crying for a “free” update (pay what a new customer would pay, even if they’re only 2 months into contract) and others are complaining about the 599/699 pricing. The other side is saying “tough titties, you signed on the dotted line”.
Here’s the problem as -I- see it:
1- The fact that all the carriers Apple deals with have exclusivity agreements for the their geographic region basically means that the 599/699 pricing for a “no contract” phone is balderdash. That is a purely made up number ($200 of extra pure profit) thanks to the lock-in monopoly. Apple gets to price the phone as they see fit, at some super duper gouging price, because customers don’t have a -reasonable- choice…and that’s good for their Carrier partners.
2- AT&T’s contract basically states, in black and white, that they feel their “subsidy” is worth $175 + 1st month’s rent and activation. Any Joe Schmoe can grab the phone for $235, sit on it for a month and a day, ETF, and walk away “contract-free”. Total=$480
That kills all this other BS talk about the ethics of the subsidies for the contract-free phone. There is NO way AT&T is taking a $400 bath on those phones, therefore any $$$ they derive above and beyond that is purely punitive to “loyal” customers. [Might give some the idea that it is the company's business plan to capitalize on meekness.]
3- AT&T’s contract also states that the ETF is pro-rated for all 3G customers, meaning early adopters are about $55 down on that ETF and have paid AT&T for the first month’s service. That leaves about $120 left +- some, substantially lower than the $200 “premium” they have chosen to levy.
4- What’s with the $18 “upgrade fee”? I didn’t know that kicking a returning customer in the balls for signing a new 2-year contract was considered a smart business move. Although, I guess it is fair, considering they kick new customers in the nuts twice ($36) for activation.
Which leads me to my conclusion: it is bad enough that the marketplace in the US is so “blood-sucking” collusive that we deal with getting nickel and dimed constantly with stupid fees, draconian contracts, outrageous rates, and imposed subsidy models. But when AT&T thinks we’re just too stupid/lazy to realize that $200/$400 of hard-earned cash is a price of CONVENIENCE, the price of hanging onto a 10 digit number, the price of being a “loyal customer”, the price of remaining an indentured servant, well I guess some folks get pissed…and call them names.
Personally, I think they deserve it. Because only a greedy, stupid company could think that sticking a finger in the eyes of their life-blood customers is a good idea.
Brilliant. If you aren’t a lawyer – you should be.
Further, an AT&T spokesperson is quoted at InformationWeek stating that the ETF path would work: [http://www.informationweek.com/news/personal_tech/iphone/showArticle.jhtml?articleID=217800737&pgno=2&queryText=&isPrev=]
Some iPhone users suggest canceling your contract, paying a cancellation fee of a maximum $175, minus $5 for each month you’ve already served on your contract. Then, sign up again for a new contract, and buy an iPhone 3G S at a subsidized cost. Siegel says that would work, but it doesn’t take into account a $36 activation fee, and it’s a lot of hassle for a relatively small savings.
–AT&T spokesman Mark Siegel
I don’t trust an AT&T spokeshole to be honest or accurate, however it clearly shows at least AT&T’s internal position is that the ETF clears the contractual obligations. It also belies a stupefying lack of valuation of $200-$400 dollars.
I’m sure that AT&T doesn’t pay the full $599/699, but it’s pretty darn close.
I encourage everyone to look at AT&T’s quarterly earnings last quarter and see how much profit per customer they made. Per customer, AT&T makes around a $11 profit each month. Does that sound like the “blood-sucking” you expected?
If AT&T is only making $132 off you each year (most of your monthly costs are going back into the phone subsidies and network), why are you getting mad that they’re taking an additional $200 subsidy to get you an early upgrade when you haven’t paid the last iPhone completely off yet?
Doesn’t make much sense to me.
And here’s a thought — why not hang out until next year when you’re finally eligible for upgrade and then they’ll have the next latest and greatest iPhone, while everyone who got the 3GS will still be mad they have to pay more?
This is totally ridiculous.
If you have to argue about it like this, you can’t afford it. Give it up and get a Razr or an old model BB
2 year contract = a new phone every 2 years
if you want a new phone every year, you have to pay the price.
What is so difficult to understand?
Probably, its the “the other guy has a better iPhone for the same or less price I paid for” factor.
We’re all talking about this ’subsidy’ that AT&T is paying. What is it really?
Does Apple actually receive $699 per phone sold? Does Apple really get the ‘retail’ price from AT&T? *most* products sold at a retail price have a wholesale price attached to them. The retailer pays the wholesale price to the manufacturer.
From what I understand, AT&T is already paying a portion of the monthly account fee to Apple anyway. Do they get full retail for the phone equipment *plus* a revenue cut from each subscriber?
I suspect AT&T is paying a wholesale price to Apple, and part of the deal to get to pay a wholesale price up front is that it’s more or less made up for by the monthly revenue split. Just a hunch – I’ve not seen the confirmed anywhere.