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

[bigmc6000]

I think that is a decent argument. Although did AT&T activate any iPhone 2G in stores? If not then you really can't say they are losing money as there was no contract from the outset obligating you to pay them.

Don't get me wrong, I am paying for my iPhone on AT&T like others. Of course I guess I did somewhat screw over AT&T by getting the free phone then getting the iPhone, but I also don't have any real plans on upgrading either.

Well AT&T had an exclusive contract and it was assumed that if you bought a phone in the US you'd take it home and activate it with AT&T. They make money off of that. That's why they agreed to let people do it at home. Every single person that went looking for an iPhone and couldn't find one because they were out of stock (due to the unlockers) cost AT&T $60+ a month. So yeah, I think it cost AT&T some dough and forced Apple to agree to this in store activation model because AT&T doesn't want to be selling phones from their stores to have them end up on TMobile (I think that's fair).

Steve actually said that in "almost" all of the first 22 countries, the maximum price will be $199.00, which seems to release Apple from responsibility for, frankly, misleading its consumer base (assuming all of this comes out and is true, this is still "MacRumors" after all regardless of the "reliable" source).

As posted earlier the most you're going to pay for an 8GB model will be $199. If you want to upgrade early you aren't paying $199 + $175 for the phone. You're paying $199 for the phone and $175 for getting out of the contract early.

It's as simple as that - it's two separate charges just on the same bill.

 

[dayton]

That's not what I'm saying.

Point is if AT&T sells the unsubsidized iPhone for too high a price, people will just cancel their existing contract ($175 termination fee) and buy a subsidized iPhone ($199) for a total cost of $374 ($175 + $199).

This just means that AT&T can't price the unsubsizdized phone much higher than that regardless of what they are actually paying as a subsidy.

arn

In my past experience with AT&T (then Cingular), this "cancel and signup again" scenario wouldn't work that smoothly. At one point, AT&T required that a canceled account be inactive for at least 6 months before the person attached to that account would be considered a "new" customer with them.

I switch to T-Mobile a few years ago due to geographic reasons, but a couple of months later went back to Cingular. At that time, they said my old account had to be reactivated and that I did not qualify for new account subsidies. I don't know if this is still a policy though.

 

[supmango]

there are so many idiots on this board who think that apple or ATT is cheating them. ill say it again, you all cheated them by unlocking phones and what not. this is a business for them, why cant some of you understand this. they dont make phones to truly make you happy, they make phones to make themselves happy. there is nothing wrong with advertising the phones as 199/299 with a two year agreement. if you think otherwise, i just dont know what else to say...

Personally, I own a first generation iPhone for my wife and it was not unlocked. Most of us here are upset because we are in a slave contract with AT&T which basically says that all pricing of phones for us is different than it is for the rest of the nation, so why would we have unlocked our iPhone's when we are in contract with AT&T? I realize this is how it is across the board in all cell phone companies, but it still doesn't make us ready to roll over and accept it. I am perfectly fine not getting the damn thing and waiting for Microsoft to get off its a%# and release a good true alternative that I could use on a different network. There are a lot of us in this situation, and unfortunately many will just wait or pay the likely exorbitant price that AT&T decides on. I won't... and it will give them some pretty bad press in the end regardless of the fact that it is a standard policy.

I have to disagree with Arn on the notion of the unsubsidized price being less than 175.00. The reason is really based on personal experience with the company and the fact that contract termination would cause me to loose my current phone number. I have had this number for a long time and many people know it. Changing it would be incredibly irritating because I could not even begin to tell you who all has it... not to mention all of the companies I do business with that have it on file as a primary number for me. Obviously this is opinion and some people will think I am making too big of a deal over it.

I'm going to buy one and jailbreak it and tell AT&T they can come over and pick up their early termination fee. F these guys.

Unfortunately there probably wont be enough of you doing this to make a difference. I appreciate the sentiment though.

 

[know-it-all5]

People keep on saying that the iPhone is no different than any other phone. Except it kind of is. The iPhone is AT&T's flagship phone, it's basically their phone. They have a 5 year exclusive on it and they are the only ones in America at the moment that are able to say "the iPhone is exclusive to AT&T". So I think there could be an exception to the rule.

That is precisely the point I have been trying to make all along... Positively brilliant!

 

[EagerDragon]

It's not a shame, it's a fact. The average cellphone buyer has proven unwilling to shell out $400, let alone $600 for an iPhone. Why do you think Apple cut the original price so quickly? After the initial rush by fanbois, demand dried up for a $600 iPhone. More bought the $400 iPhone, but not as many as Apple wanted. So they make agreements with the cell phone companies to subsidize the 3G, and sell more phones for Apple.

If Apple had come out with the iPhone unlocked for $600, it would have bombed. Only a tiny % of Americans even know what an unlocked phone is, let alone want to buy one.

Not only that, but what good is an unlocked 3G iPhone in the USA if the only carrier that is compatible is AT&T anyway?

It maybe possible to run the 3G iPhone in T-mobile network without the 3G network, but why bother?

 

[DimeTech]

Most of us here are upset because we are in a slave contract...

I don't think slaves signed contracts voluntarily to be in the situation there were in....think about what you say.

 

[bigmc6000]

I don't think slaves signed contracts voluntarily to be in the situation there were in....think about what you say.

And neither did that second HD you hooked up and ran as a "slave." Slave has way more definitions than just the politically incorrect one...

 

[rlmccormick]

I find it horrible that such an important demographic of Iphone buyers will be screwed out of the subsidy. I just can't see apple stores selling it for one price to some people, and telling att customers who are not upgradeable at the moment, that they need to pay more. I can see att stores doing that, but not apple... no way.

I wonder if Apple stores will end up selling it for one price and tell customers that ATT may bill them for the remainder if they do not qualify for subsidized pricing. That would be one way to make it smooth while in the Apple store and allow ATT to do the dirty work of bill collection later.

 

[gtree10]

Another iPhone

My wife got a new RAZR in January (I got an iPhone in March). I wonder if she's eligible for the subsidy (we've been Cingular/ATT customers for over 10 years). If not, could I get the new iPhone and transfer my current iPhone to her number. 3G would be cool but I like the current iPhone's design better.

 

[know-it-all5]

I wonder if Apple stores will end up selling it for one price and tell customers that ATT may bill them for the remainder if they do not qualify for subsidized pricing. That would be one way to make it smooth while in the Apple store and allow ATT to do the dirty work of bill collection later.

I'm not gonna lie, that sounds like what will probably happen. It would definitely make things go simpler. Making the only job apple clerk would need to do, being selling the phone and activating it on a given contract. Then they don't need to mess with all the financial mumbo jumbo.

 

[the_wallcrawler]

So I guess I am technically a current iPhone customer in that I pay a monthly amount for voice and the iPhone data plan. But I don't physically have the phone anymore as I sold it a couple weeks ago in anticipation of 3G. I'm under the impression that I'm good to go with the subsidized price. Is that accurate?

 

[know-it-all5]

My wife got a new RAZR in January (I got an iPhone in March). I wonder if she's eligible for the subsidy (we've been Cingular/ATT customers for over 10 years). If not, could I get the new iPhone and transfer my current iPhone to her number. 3G would be cool but I like the current iPhone's design better.

Based on your situation, if your wife is not eligible for a subsidy, you could mmove your phone to her number, and be qualified for a subsidy for your own 3g iphone (THis would assume you didnt get any subsidized att phone within the last two years or so).

So I guess I am technically a current iPhone customer in that I pay a monthly amount for voice and the iPhone data plan. But I don't physically have the phone anymore as I sold it a couple weeks ago in anticipation of 3G. I'm under the impression that I'm good to go with the subsidized price. Is that accurate?

yes, based on what we have been hearing. Unless something drastic happens, enjoy your subsidized iphone 3g.

 

[supmango]

I don't think slaves signed contracts voluntarily to be in the situation there were in....think about what you say.

Sorry if I offended someone with that, my intention is to get across the fact that, if you didn't really sit down and look at the contract you were signing (which you really were not required to do to agree to it) then you may not have realized the implications. And, just so we are all clear, some "slaves" did sign contracts, just not necessarily the ones who were in the US. (thank you to my African Civilization class that just came in handy)... research it a little before you get too offended.

 

[guffman]

All of this confusion, and the fact multiple summarization's have been posted to clarify to the masses marks a sign of the downfall of the iPhone 3G.

Apple needs to shake AT&T before this gets any worse.

Haha....are you on Verizon or Windows Moible's payroll? I'm pretty sure the fact that we are HAVING this discussion means the iPhone will do just fine

 

[the_wallcrawler]

yes, based on what we have been hearing. Unless something drastic happens, enjoy your subsidized iphone 3g.

I can't imagine they would expect you to trade in your old phone or something. That would be insane.

 

[Plutonius]

Giving subsidies to everyone is important, even if it means att loses a few bucks that they will end up getting in the long run.

It's easy to say when you aren't the one losing money on sales.

Let's see some hard numbers that prove AT&T will make more by giving everyone subsidies.

 

[voicegy]

Sturm und drang

*sigh* Guess we'll all have to WAIT to find out the DETAILS from AT&T regarding what the pricing will be for CURRENT AT&T customers who do NOT have an iPhone.

Everything else looks pretty clear to me.

Don't know why folks sold their 1st gen iPhones in the first place - how's life without your iPhone been so far?

I got my iPhone day one, 2 year contract, voice $39.95 and data 20 bucks, including 200 SMS texts. EDGE coverage is fine where I live, and I'm on Wi-Fi a lot anyway. The next gen iPhone (3G) doesn't appeal to me enough to want to ditch what I have, pay 2 or 300 bucks for, nor up my data plan from 20 bucks to 30 bucks + 5 bucks more for those formally "free" 200 SMS texts. I'd be out of pocket 300 bucks plus 15 bucks more a month for 2 years. Why bother?

iPhone 2.0 update will rock, and it's free. So I'm not missing out on anything except 3G and GPS - I have GPS in the car, so I don't care.

Sure, I'll be FORCED into this switch next year at this time when my current, cheaper contract expires - but by then, Apple would have come out with iPhone 3G ver.2, and I would expect it would be WAY worth the wait.

This 3G phone isn't so much iPhone ver. 2 - rather, it's iPhone 3G ver. 1.0 Think about iPhone 3G ver. 2.0 - THAT'S what I'd rather wait for.

(And I know all this only speaks to current iPhone owners who have been in their contracts for a while already - which is more than a few of us, I'd surmise.)

 

[DimeTech]

Sorry if I offended someone with that, my intention is to get across the fact that, if you didn't really sit down and look at the contract you were signing (which you really were not required to do to agree to it) then you may not have realized the implications. And, just so we are all clear, some "slaves" did sign contracts, just not necessarily the ones who were in the US. (thank you to my African Civilization class that just came in handy)... research it a little before you get too offended.

you didnt offend me. I was just giving you a hard time. I guess its just my personality. I think the "slaves" that signed contracts were called indentured servants

 

[optophobia]

New iphone, old plan... ?

So anyone have any idea if I buy an new iphone and just insert my old iphone sim, would I be able to use the 3G network or would they know and it would still only let me use the edge network ?
Hence continue to use my cheaper iPhone plan ...

 

[supmango]

you didnt offend me. I was just giving you a hard time. I guess its just my personality. I think the "slaves" that signed contracts were called indentured servants

Here they were called indentured servants, in Africa (according to the professor who taught the course) they were actually slaves. Wikipedia has an interesting article on the African slave trade if you are interested, it broadly covers this topic.

 

[gkarris]

So anyone have any idea if I buy an new iphone and just insert my old iphone sim, would I be able to use the 3G network or would they know and it would still only let me use the edge network ?
Hence continue to use my cheaper iPhone plan ...

No, you can't leave the store without activation which means they transfer your number/account to the new phone and you must get the newer 3G plans with it.

 

[tw59]

$325 subsidy figure makes no sense

199+325= 524. ATT has been selling the 8 GB for $399 for some time. So are we to believe that ATT has been subsidizing the iphone to the tune of $100+ all this time? I don't buy that.

The ver2 iphone probably costs less then the one it is replacing. The GPS chip is figured to cost apple $5. The first estimate is that actual assembly cost to apple is about $100. So why can't they sell it to ATT for $199 with 100% markup, which is still more then the industry average for electronics. Apple has a huge investment in having as many customers as possible tripping to it's iphone store.

As for ATT, they sell a current basic phone customer $30-35 more in monthly services that costs them next to no investment since the network is sitting there waiting to be used.

 

[bjornm]

you didnt offend me. I was just giving you a hard time. I guess its just my personality. I think the "slaves" that signed contracts were called indentured servants

How long did these people wait in line to get the slave contract, does anyone know?

Also, for the ones that were not able to get their hands on a slave contract, how much did they have to pay for it on the black market?

 

[gkarris]

199+325= 524. ATT has been selling the 8 GB for $399 for some time. So are we to believe that ATT has been subsidizing the iphone to the tune of $100+ all this time? I don't buy that.

The ver2 iphone probably costs less then the one it is replacing. The GPS chip is figured to cost apple $5. The first estimate is that actual assembly cost to apple is about $100. So why can't they sell it to ATT for $199 with 100% markup, which is still more then the industry average for electronics. Apple has a huge investment in having as many customers as possible tripping to it's iphone store.

As for ATT, they sell a current basic phone customer $30-35 more in monthly services that costs them next to no investment since the network is sitting there waiting to be used.

$199 + $200 (subsidy) + $125 (money originally from revenue sharing with the first iPhone) = $524

 

[bitslap47]

...The first estimate is that actual assembly cost to apple is about $100. So why can't they sell it to ATT for $199 with 100% markup, which is still more then the industry average for electronics.

You are forgetting advertising/marketing, design, R&D, and engineering costs including Software Development.

Hardware and manufacturing costs are only a small part of a good product.