AT&T iPhone 3G $199/$299 Pricing Policy

[MacRumors]

After our story about the AT&T subsidy for the Apple iPhone, it appears there remains an enormous amount of confusion about AT&T's iPhone 3G upgrade policy. We had previously posted a guide based on circulating rumors describing individual eligibility for the $199/$299 iPhone 3G pricing.

The main area of confusion relates to existing AT&T customers who don't currently own an iPhone. Some interpreted Apple's initial announcement of $199/$299 as an absolute price, not subject to qualification. Adding to the confusion is that AT&T sales representatives are giving conflicting information about whether or not individuals need to meet special eligibility requirements.

A recent InformationWeek story provides some official word from AT&T spokesman Mark Siegel. Siegel clarifies once and for all that current AT&T customers using something other than an iPhone will need to qualify to receive the iPhone 3G's subsidized $199/$299 price.

While payment history is one factor, "how long the person has left on the current contract" also weighs into the decision. Siegel refused to provide exact criteria since "there's a whole lot of variables, and [he] would hate to give specific criteria." AT&T's standard upgrade criteria, however, are published online and depends on a combination of how much your monthly bill is and how much time is left on your contract.

Siegel states that an "unsubsidized" price for the iPhone has not yet been determined and AT&T will announce that price sometime before the iPhone 3G goes on sale.

To Summarize:

- iPhone 3G will launch in the U.S. on July 11th
- $199 (8GB), $299 (16GB) represents subsidized iPhone 3G prices
- If you are currently an iPhone AT&T customer or not currently an AT&T customer, you qualify for the subsidized pricing
- If you are currently a non-iPhone AT&T customer, you will be subject to certain qualification criteria. AT&T's "standard" upgrade criteria are posted here but may be subject to change.
- If you don't qualify, there will be a higher unsubsidized price for the iPhone 3G which will be announced before July 11th.
- Speculation: While rumors have pegged AT&T's subsidy at $325, it seems very unlikely that the unsubsidized price will be this high ($199+$325). Historically, canceling your existing mobile phone contract for the typical $175 early-termination fee would automatically qualify you for any future subsidized phones. As a result, we suspect the unsubsidized pricing will be about the same as the early-termination fee (about $199+$175 for 8GB).




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[carterst]

they are going to lose a lot of customers over this. me, for example.

[xix]

Originally Posted by carterst

they are going to lose a lot of customers over this. me, for example.

Apple and AT&T will be fine, trust me.

[Ja Di ksw]

Wait, so current AT&T customers who have been with AT&T for less than 2 years get treated worse than people who have never been with AT&T?

That's some bulls***.

[ruinfx]

Originally Posted by Ja Di ksw

Wait, so current AT&T customers who have been with AT&T for less than 2 years get treated worse than people who have never been with AT&T?

That's some bulls***.

a company is giving incentives to new customers that are not available to current customers? inconceivable!

[dotcomlarry]

This sort of speculation and information *before* things are finalized only serve to further confuse both existing and future customers. Seriously, just wait until the day it's released -- by then everything will be hammered out.

[noverflow]

But what about my situation?

I have an iPhone. BUT I bought it only a few months after getting a different phone that was subsidized.

According to this, I have an iphone, so I can upgrade. Or do I need to wait until my upgrade cycle is up?

[tirerim]

Originally Posted by Ja Di ksw

Wait, so current AT&T customers who have been with AT&T for less than 2 years get treated worse than people who have never been with AT&T?

That's some bulls***.

Sure. New people need an incentive to switch carriers. Existing customers who are locked into a contract (and it's only customers under contract that this applies to) are stuck, unless they feel like paying the early termination fee, so AT&T has no reason to offer them a good deal. This is exactly the same way that every other carrier in the U.S. operates, so switching away isn't going to improve anything.

[supmango]

Originally Posted by tirerim

Sure. New people need an incentive to switch carriers. Existing customers who are locked into a contract (and it's only customers under contract that this applies to) are stuck, unless they feel like paying the early termination fee, so AT&T has no reason to offer them a good deal. This is exactly the same way that every other carrier in the U.S. operates, so switching away isn't going to improve anything.

It is true that it won't improve anything. However IF (and this is a big if) everyone in a slave contract with AT&T who wanted a new iPhone 3G decided to cancel their current contract and not buy a new iPhone, they might actually feel that one. Still wouldn't do anything about the immediate situation, but it might make Apple rethink the scenario for future business relations with AT&T (yes I know about Apple's slave contract for 5 years with AT&T as well). Granted, none of this will happen because it would require the masses to THINK instead of taking it up the #$@.

[futherout]

Originally Posted by tirerim

Sure. New people need an incentive to switch carriers. Existing customers who are locked into a contract (and it's only customers under contract that this applies to) are stuck, unless they feel like paying the early termination fee, so AT&T has no reason to offer them a good deal. This is exactly the same way that every other carrier in the U.S. operates, so switching away isn't going to improve anything.

Yea because you got the same incentives when you signed up.

[mavis]

Originally Posted by Ja Di ksw

Wait, so current AT&T customers who have been with AT&T for less than 2 years get treated worse than people who have never been with AT&T?

That's some bulls***.

How is it BS? That's how the industry works! Carriers subsidize phones to attract new customers, and then lock them into a contract to guarantee that they'll be able to recoup their losses and actually make a profit. Or did you think that phone you got a year ago had an actual value of $50?

I don't know why people are so upset about this. Expecting to be able to get a new phone at a subsidized price without having first fulfilled your existing contract is kind of ridiculous. The exception is of course original iPhone owners - since AT&T didn't subsidize that phone, instead paying Apple a month revenue sharing sum, I'm sure they're anxious to get people off of that contract and on to one that doesn't require monthly payments to Apple.

[latestmonkey]

Originally Posted by mavis

How is it BS? That's how the industry works! Carriers subsidize phones to attract new customers, and then lock them into a contract to guarantee that they'll be able to recoup their losses and actually make a profit. Or did you think that phone you got a year ago had an actual value of $50?

I don't know why people are so upset about this. Expecting to be able to get a new phone at a subsidized price without having first fulfilled your existing contract is kind of ridiculous. The exception is of course original iPhone owners - since AT&T didn't subsidize that phone, instead paying Apple a month revenue sharing sum, I'm sure they're anxious to get people off of that contract and on to one that doesn't require monthly payments to Apple.

It never ceases to amaze me how people never take into account how certain industries work before pissing and moaning about their own pocketbooks.

I just got a new phone in Jan from AT&T while waiting for the new iphone. Now I am not eligible for it but that'd be the case with ANY other phone. Why is this so hard to understand for people? At&T is not in business to give you money.

As for them paying anyones early termination fee to get them to switch to AT&T.. jesus h christ that's funny.

[macduke]

Originally Posted by mavis

The exception is of course original iPhone owners - since AT&T didn't subsidize that phone, instead paying Apple a month revenue sharing sum, I'm sure they're anxious to get people off of that contract and on to one that doesn't require monthly payments to Apple.

That really does make a whole lot of sense, because they would have to sign a new contract under the new subsidized terms. They still have to pay Apple the difference in price though. I bet the payments to Apple end up being more over 2 years than the subsidy payments since they are letting existing iPhone customers upgrade.

[Darkroom]

Originally Posted by mavis

I don't know why people are so upset about this.

i believe it's just a reminder to everyone about how sleazy telecom companies are, and it's kinda sad to see (the new) Apple INC. jumping aboard... honestly, everyone knows someone who had a problem with their mac computer in the past year - dying macbook HDDs, iMac screens that look worse than budget sPCs, MacBook Pro stripes, etc., but is (the new) Apple INC. addressing these issues? no... is (the new) Apple INC. making a killing on iPhone sales, $100 iPhone development fees and 30% revenue from iPhone apps sold? yes.

[zync]

Originally Posted by Ja Di ksw

Wait, so current AT&T customers who have been with AT&T for less than 2 years get treated worse than people who have never been with AT&T?

That's some bulls***.

Have you had a cell phone in America yet? That's how it always works. At least until you tell them you're canceling your plan then they get a little bit nicer, especially Sprint.

[carrjar]

Originally Posted by Ja Di ksw

Wait, so current AT&T customers who have been with AT&T for less than 2 years get treated worse than people who have never been with AT&T?

Correct. You received a subsidized price on your phone when you started as a customer. This is how EVERY provider does it, since cell phones first existed.

[boss1]

Originally Posted by carrjar

...This is how EVERY provider does it, since cell phones first existed.

That's actually a good 'cell phone history' point. They needed to figure out how to justify the cost of this new cell phone trend to the consumer. Even at that time you could pick up a plain household phone for as low as $19.99.

So they came up with and used the same subsidization plans we see today as a means to avoid allowing the consumer to look at the sticker price on the phone and saying "$ ###.## for a phone?! #$% that! ".

[Harley05]

Every current AT&T customer that has a subsidized phone should have to wait. Period. The iphone 3G is no differnt than any other phone. Just because you all want a new toy doesn't mean AT&T should make new rules for you. Get over it already.

It's sad that forums which should be here to be helpful and informative end up a bitch session by a bunch of idiots that that are to cheap to live up to their responsibilities so they throw a fit like a 6 year old. Kudo's for looking like complete idiots and not understanding a basic cell phone contract.

[bjornm]

Wait, so current AT&T customers who have been with AT&T for less than 2 years get treated worse than people who have never been with AT&T?

Incorrect (the statement that AT&T customers are treated worse, that is). The only people that might be treated better are current AT&T customers.

Why? - What AT&T are saying is that they are might be willing to pay the cost of you terminating your old contract early (if you are really good customer). This is only possible for existing AT&T customers.

If you are a T-mobile customer with one year left on your contract, I really doubt that AT&T will pay for your T-mobile termination fees.

Actually EVERYONE is eligible for a subsidized phone provided that they sign a new 2-year contract. What you do with your old contracts and whatever agreements is your business.

How can this be hard to understand?

How can this be unfair?

[gkarris]

Originally Posted by Ja Di ksw

Wait, so current AT&T customers who have been with AT&T for less than 2 years get treated worse than people who have never been with AT&T?

That's some bulls***.

Yes, it's about getting new customers, not helping out the ones they are already getting money from...

Originally Posted by mac.life

CRY CRY CRY...

Is EVERYONE here a 12-year old?
(and that's an insult to 12-year olds, as I was pretty sharp at that age, so maybe it should read,"Is EVERONE...9-year olds?"

For those in the USA:
EVERYONE knows the iphone should be a full-retail price of $400-600+.....

EVERYONE knows that when you buy a SUBSIDIZED phone that there are STRINGS attached (no matter how much you pretend otherwise).

EVERYONE knows that when you sign a Carrier CONTRACT, you AGREED to those TERMS... So Stop CRYING Crybabies!!!

Unless, of course, you are 12 years old (or mentally challenged- and then we will all understand)... or maybe it's WINDOZE folks wanting an iPhone that are pleading 'Temporary Stupidity' (I might be able to buy that excuse!)

----

WHAT?

• You thought that $50 phone REALLY cost just $50!? (you may have been born on a Tuesday, but I doubt it was last Tuesday if you are posting here...)
• Or that $200 so-called Multi-media phone really cost only $200!? lol Get real, that piece of electronics costs (at real retail) $400-750 (just check out Nokia's REAL prices if you think an iPhone is expensive! lol).

But I want the latest and greatest phone from Steve Jobs with GPS, 3G, and games so I don't have to turn on my GameCube to play "Super Monkey Ball", and I want it for FREE!

(runs off crying....)

[fishmd]

Originally Posted by Ja Di ksw

Wait, so current AT&T customers who have been with AT&T for less than 2 years get treated worse than people who have never been with AT&T?

That's some bulls***.

Sorry, not trying to flame anyone. I understand everyone's frustration by this. But this is what all cell phone companies have done since the begining. If you are stuck with the company already and still within a contract and not "upgrade elibible", you will have to pay an unsubsidized price to get that new phone. It would not make good business sense for the company to continue to give out subsidized phones to everyone anytime they wanted it. They would not be able to recoupe enough money if they did that.

That being said however, I am a bit confused. I do not understand why in the world a current iphone user would be able to upgrade for the subsidized price. That is the part that makes no sense to me. If Mr. Smith with his crap clamshell flip phone is stuck and cannot upgrade, why can Mr. Cool with his current iphone....Oh wait, I actually do know. When they bought the first gen iphone, they did not get a "subsidized" phone. They did pay full retail. And so they are still in fact upgrade eligible, provided that they did not in the interem between the time they signed up and now, by another phone other than the iphone at a subsidized price point with ATT.

OK, that should explain it all. Nough said.

[Catalyx]

Originally Posted by carterst

they are going to lose a lot of customers over this. me, for example.

Not sure what your reasoning is that AT&T will lose "a lot" of customers since the only ones who would care are those who want an iPhone but can't quality for the subsidy.

Why would they pay a fee to leave the official carrier of the product they want? Even if they get an old iPhone to use on T-Mobile I think the cost of that plus AT&T termination would be close to an unsubsidized 3G model which is better anyways...

[winterspan]

Originally Posted by carterst

they are going to lose a lot of customers over this. me, for example.

Originally Posted by supmango

Yes, it is likely that AT&T is going to screw over its current customers like they have done for a very long time.

Originally Posted by Ja Di ksw

Wait, so current AT&T customers who have been with AT&T for less than 2 years get treated worse than people who have never been with AT&T? That's some bulls***.

Anyways, I really don't understand all the outrage and complaining. AT&T, just like EVERY OTHER cellphone company in the United States operates this way. When you sign up for new service, you'll receive a new mobile phone that is provided at a discounted price in return for agreeing to a certain contract period. When the contract period is finally up, they'll offer you an equipment "upgrade", which entitles you to another discount on a new phone, since the original subsidy has been "payed back" by fulfilling the terms of your contract. This equipment subsidy, which in the United States is usually around $100-$250, is the reason for the fee associated with getting out of a contract early. Without the fee, people could sign up for service, get a high-end phone for the discounted price, cancel the contract and sell the phone for profit on ebay.

In regards to AT&T and the iPhone 3G, There will most likely be a few different scenarios depending on your situation.

1) If you are an existing AT&T customer who received a discounted phone on your current contract, then you have not yet "payed off" the subsidy. Therefore, you will most likely NOT be eligible for a discounted "upgrade", and will most likely have to pay the full price of an iPhone 3G.

2) If you are an existing AT&T customer who initially received a discounted phone, but have fulfilled the original contract, you are most likely eligible for a discounted "upgrade". This "upgrade" enables you to get a new phone at a discounted price, and that will most likely include the iPhone 3G for $199/$299.

3) If you are an existing AT&T customer *who bought an iPhone* when they signed up, you will most likely be eligible for an "upgrade" and thus the $199/$299 iPhone 3G price, since it is believed the ORIGINAL iPhone was *NOT* subsidized. In other countries, it appears some carriers are offering a free or cheap upgrade to the new iPhone 3G by trading in your old one.

This is all just speculation based on current AT&T policies with other phones. Maybe they will also help out current AT&T customers who are NOT eligible for an "upgrade" by letting them have the $199/$299 iPhone 3G price if they extend their contract another 2-years pass their existing ones.. It's all speculation until we see an official press release.

Originally Posted by mavis

How is it BS? That's how the industry works! Carriers subsidize phones to attract new customers, and then lock them into a contract to guarantee that they'll be able to recoup their losses and actually make a profit. Or did you think that phone you got a year ago had an actual value of $50?

I don't know why people are so upset about this. Expecting to be able to get a new phone at a subsidized price without having first fulfilled your existing contract is kind of ridiculous. The exception is of course original iPhone owners - since AT&T didn't subsidize that phone, instead paying Apple a month revenue sharing sum, I'm sure they're anxious to get people off of that contract and on to one that doesn't require monthly payments to Apple.

Originally Posted by latestmonkey

It never ceases to amaze me how people never take into account how certain industries work before pissing and moaning about their own pocketbooks..

Wow, finally some rational voices among the bitching and moaning...

Originally Posted by HumblePieEater

This is one more reason why there should be no lock-out from a carrier a user wishes to use for any particular phone. I should be able to purchase, straight-out an iPhone and use it on a carrier of my choice, even if that carrier can't support every feature of the phone.
Someday, I hope an American customer can do this without a hassle.

Call your congressman. Unfortunately (IMHO), the USA operates a much more Laissez-faire form of capitalism than other, more progressive countries, especially in Europe. In this ideology, any regulations or legislation are seen only as a "hindrance" to business, and they should be allowed to pretty much do whatever they want. This of course only holds until corporate lobbyists want legislation passed that protects business monopolies and makes it difficult for new competitors to enter the market. One of the reasons Europeans have better and more competitive mobile phone markets is because many individual countries and the EU mandated that telecom should only use GSM/UMTS networks, instead of the hodgepodge we have in the USA. It's better now, but we still have two major network technologies being used, and since a cell phone can only run on one of them, it makes it more difficult to switch to the carrier with the better deal, and competition and therefore consumers suffer as a result.

[know-it-all5]

Originally Posted by winterspan

Call your congressman. Unfortunately (IMHO), the USA operates a much more Laissez-faire form of capitalism than other, more progressive countries, especially in Europe.

And that is why we should vote Barack Obama for president. All of our problems with crappy companies like att will be solved.

[bigjohn]

Originally Posted by know-it-all5

And that is why we should vote Barack Obama for president. All of our problems with crappy companies like att will be solved.

Perhaps, but we'll end up with twice as many problems with many more companies and this time the government will be one of them.

At least you'll have your iPhone while you're walking to work.