Contract and Subsidy Issues for iPhone Users Looking to Upgrade to iPhone 3G S

[biomorph]

1st Gen iPhone

I bought my 1st Generation iPhone unsubsidized and signed a 2 year contract with AT&T in February 2008. Do you guys think I am eligible for an upgrade to the iPhone 3GS when it comes out June 19th? I feel like I should be considering I paid full price for the original iPhone. On my AT&T online account it says i am eligible for an upgrade but when I try to upgrade it doesnt show the iPhone 3GS for me to buy. Where else would you be able to check if you were eligible for an upgrade? Is there anyway you can check through Apple site?

 

[nevesis]

Isn't the bigger problem that the product cycle and the contract cycle are out of sync?

Apple releases a new iPhone roughly once a year.

AT&T contracts are 2 years.

An iPhone user that can't get a subsidized iPhone3GS until March 2010- and waits it out- is now only 4 months away from getting the NEW June 2010 iPhone... or else they'll be upgrading to a EOL iPhone3GS in March 2010. The smart/thrifty user not wanting to pay a non-commitment premium for a 2-year-commitment phone is going to skip the iPhone3GS all together and get the next great iPhone.

The next iPhone (June 2010) will be subsidized for that user, but will lock them in for another 2 year contract... not allow them to upgrade again until 2012. This user is going to potentially end up skipping owning 2 iPhone versions.

I may be wrong here- but since the iPhone to iPhone 3G product update was subsidized and allowed mid-contract, Apple was able to report stellar sales of iPhone 3G. Now that this product transition is not subsidized, I'd fear that there'll be a lot less 3GS upgraders (including myself) and subsequently Apple will have far fewer sales. The anti-Apple press will see this as a loss of Apple "LoveMark" position and the stock will see an enviable sell-off.

Along these same lines... anyone that is upgrading now... you're locked in for the next two years, and if the ichat/front camera/oled/tv remote/coffeemaker deluxe iPhone is the next one in the product pipeline-- you'll be paying full price for it all over again because you'll only be half way through your new contract. You have to ask yourself if you're going to shoot a lot of movies or regularly go orienteering with your handy digital compass? For me, the new phone isn't that "insanely great" or earth shattering.

Again, I could be wrong, but feel the iPhone3GS offers little the current 3G can't do. I can confirm that even "Find my iPhone" works with the GM 3.0 firmware on a 3G iPhone... (and BTW it's live if you log into me.com and enable in Settings>Mail,contacts, Calendars>MobileMe on your iPhone).

Best post on any forum in the past two days concerning this issue. Well said.

 

[Pwned]

I understand the whole subsidized two year contract deal and have no issue with it. What I find unfair and have issues with is the different dates that people are being told they can upgrade. If two people bought the iPhone 3G on the release date, they should both be eligible for upgrade at the same time. This is not what is happening though. Some people are being told they can upgrade in July, while others are being told they can't upgrade until March 2010. This is where all the issues are for me. The price you pay per month should not matter when you are only supposed to get a subsidized contract every two years. A 2 year contract is a 2 year contract.

On top of that, if I want to spend the extra $200 for the 3GS, why should I still have to sign a new 2 year deal? I am getting no breaks from ATT so why should I agree to be with them any longer than my current contract states just because I want to use a new phone?

I agree with you 100%, if you aren't getting a subsidy then there is no reason for them to make you sign up for an extra 2 years. It's quid pro quo. I paid the full, un-subsidized price for the 3g last year on release day and when I tried to pre-order the 3gs I was told I need to pay the full $699, GTFO!

 

[toneloco2881]

Oh please stop living in AT&T's butt.

Why can't AT&T can't have MMS ready for launch?

AT&T can't have tethering at launch?

Why does AT&T block Slingbox?

AT&T sucks, we would all switch if there was a better option.


How about AT&T cryptic and confusing upgrade plans that are never the same?

Ummm...ok

All I did was express my opinions on the rate plans, and peoples inability to understand why AT&T wouldn't feel it was in their best interest to give them a new subsidized iPhone every year, while taking a couple hundred dollars' loss.

I too, think it is ridiculous that AT&T can't have MMS ready at launch, slingbox over 3g, etc'. I also know that carriers like Verizon, used to block bluetooth profiles on the phone to disable you from getting your own pictures off, and disable access to the GPS module, so you have to subscribe to their own service and pay a recurring fee.No carrier is perfect as you so eloquently put, and I was just trying to get that across imo.

I still don't understand how you think AT&T upgrade plans are cryptic and never the same. They've been the same since I've been with them for 4 years??

Maybe you should read my previous post again, as it seems you didn't quite get it. If you spend more money(i.e, $99 per line) you can upgrade after a year. If you spend less then you have to wait 18 months into a 24 month contract. Clear?

 

[Patriks7]

they better figure out a deal for all of us 3G users!

I don't see a reason why they should. Do you see people going crazy when Nokia updates a phone? No. They just wait until their contract is over.

On second thought, there is a deal; pay the full price.

 

[mendosasenemy]

How the hell did people get the iPhone for free on o2 in the uk???

I had to pay nearly £150 for mine so if o2 have already set a president I expect to be able to upgrade mine and extend the contract!

 

[Enuratique]

The price you pay per month should not matter when you are only supposed to get a subsidized contract every two years. A 2 year contract is a 2 year contract.

On top of that, if I want to spend the extra $200 for the 3GS, why should I still have to sign a new 2 year deal? I am getting no breaks from ATT so why should I agree to be with them any longer than my current contract states just because I want to use a new phone?

I understand your sentiment however take the following for example. Assuming the price of the plan is padded a little bit to recoup the cost of the subsidy over time, if my plan costs me $120 / month and yours costs $70 / month, AT&T will recoup the costs of the iPhone much quicker. The way you should think of it is that the standard amount of time that most phone companies expect to recoup the subsidy is 18 months. So basically, they're "rewarding" people with megabuck contracts by allowing them to upgrade in less time because (technically speaking) AT&T is not on the hook any longer with them.

To address your second post, the phone supposedly costs $699 or more totally unsubsidized so you are still getting a break from AT&T in that case and hence the requirement.

 

[Pwned]

I don't see a reason why they should. Do you see people going crazy when Nokia updates a phone? No. They just wait until their contract is over.

On second thought, there is a deal; pay the full price.

No because Nokia = ass

 

[toneloco2881]

Eating $400 and keeping me as a customer through 2011 MAKES them money. Instead they will be losing me as a customer in 2010. Let's see $200 per month for 12 months is $2,400, subtract the $400 iPhone cost and that is $2,000 they are LOSING. I see no "loss" on their side of the board.

Did you ever think that AT&T just maybe has some internal data, or even better--ran some statistical modeling, and sees that the amount of people who are going to leave them because of this, versus the amount of NEW subscribers they can potentially lure, is infinitesimal. So it behooves them to attract new customers; the vast majority of whom will stick with AT&T and provide recurring revenue far into the future....?

 

[Bookmonke]

Ok, I added a used 3G in April and had to add the data plan and asked at that time if it would change my upgrade time and she said no, I had the original iPhone from July 07. Well guess what my plan changed but have been told it was there mistake and would be taken care of, so far I still show the $200 over discount price.

 

[diamond.g]

Untrue. I bought two original iPhones on launch day (6/24/07) and two 3G's (subsidized) on launch day (7/11/08), and am told by AT&T that I have to pay the $499 to upgrade to the 32GB one.

So you havne't passed the one year mark with your 3G and you call the other persons post untrue? Seriously?

 

[macslayer118]

I don't know why people don't understand. It's simple, really.

AT&T doesn't WANT us to have the new iPhone.
They don't WANT us to give them more money.
They don't WANT us to renew our contracts for an additional 2 years...

It's really simple.


Give them what they want...

 

[vkramer]

The problem is that the iPhone now probably costs around $200 dollars to make. Charging people $699 for a phone is outrageous.

http://i.gizmodo.com/229664/iphone-only-costs-250-to-make-rest-of-price-is-fanboy-tax

 

[LagunaSol]

I was on Verizon, you want to talk about a company that charges too much for service look there.

Don't forget Verizon's dictatorial control over the software its devices run. I can only imagine (shudder) the demands they made of Apple when Apple originally approached them with the iPhone (per rumors/myth).

Heck, we'd probably be calling it the vPhone (with vCast 3.0 software!) right now if things had gone Verizon's way.

 

[karterius]

Confused

Hi everyone can I get some information as I am a little confused. I currently own a 3g iphone. I went to I went to buyiphone.apple.com to check my eligibility.

I then entered my information.
I received this:


As a valued AT&T customer, AT&T can offer you an early iPhone upgrade with a new 2-yr commitment and an $18 upgrade fee. You may qualify for a standard iPhone upgrade on 07/12/2009.

* $299.00* — 8GB iPhone 3G (black)
* $399.00* — 16GB iPhone 3G S (black or white)
* $499.00* — 32GB iPhone 3G S (black or white)

Is this the price I qualify for on 7/12/2009, or is it the standard upgrade pricing eg: 3gs 16gb $199?

Thank you for your help.

 

[Pwned]

The problem is that the iPhone now probably costs around $200 dollars to make. Charging people $699 for a phone is outrageous.

http://i.gizmodo.com/229664/iphone-only-costs-250-to-make-rest-of-price-is-fanboy-tax

That's nearly 3 netbooks. Hell, you can get a mac mini for cheaper than that!

 

[LagunaSol]

The problem is that the iPhone now probably costs around $200 dollars to make. Charging people $699 for a phone is outrageous.

Yes, because the only costs to Apple are bolting the raw parts together.

Have you run a business before?

P.S. try buying any other iPhone-equivalent device off contract. Surprise! $699+.

 

[DVNIEL]

I swear just reading all of you chicks moaning and groaning that you should be treated special just for buying a product... I can only think of one thing.

 

[Cousin Dirk]

I still think it's a bit silly that a device such as the iPhone, which has a product cycle of 12 months, requires you to sign up to an 18- or 24-month contract in order to be able to use it to its fullest. It'll lead to people skipping an iPhone generation.

 

[mvpkent]

If I upgraded from my unsubsidized iphone 2G to a 3G on launch day am I atleast eligible for the $399 & $499 pricing? This would seem fair to me. I agree I shouldn't get a full subsidy but 1/2 a subsidy 1 month early would be nice. Besides has anyone checked what used (good condition (hell even broken)) iphone 3Gs go for on eBay?? I'll gladly pay $399 for a 3GS and sell my 3G for $300 on eBay and only end up $100 out-of-pocket. That seems like the way to go for me.

 

[andiwm2003]

Look at it this way. When the next version of the iphone comes out, presumabely this time next year, the 3G users WILL be able to upgrade to it. I also suspect Apple has taken this into consideration since the 3GS was really little more than a spec bump. I'm wondering if the release of a totally redesigned iphone will be timed for when the 3G customers contracts are up.

Of course, all the people who buy 3GS's will be the ones complaining because they can't upgrade to the new iphone.

this is one of the smarter posts here. i don't really see why people are so desperate to upgrade to the 3GS. It's only a small bump, nothing revolutionary.

I'm going to upgrade because I'm on a 2G iphone and the new features I get are a huge jump from the 2g. (And even then I'm considering to keep the 2G and see if I can ebay a cheap 3G and run it on my current contract till next year. I have to find out if this is possible). But from the 3G? All you get is a compass, video and a 3MP camera?

Next year we might get video chat, different screen, 4G and what not. If I was on an 3G I would wait. It's just a phone.

 

[Enuratique]

Because AT&T has to pay Apple that subsidy up front. So they're laying out a fresh pile of cash halfway into your contract for the promise (not guaranteed) of a longer-term payback (which they may have gotten from you anyway once your previous contract expires per its original term).

Apparently AT&T does not see the value in such a gamble.

That's a good point, but that's what the early termination fee is to protect against... Though, I could see some bean counter in accounts payable having a conniption over this because it would negatively impact the bottom line on their quarterly earnings report too adversely.

 

[Pwned]

I swear just reading all of you chicks moaning and groaning that you should be treated special just for buying a product... I can only think of one thing.

Maybe you should stop posting baby pictures and worry about your signature. Since when did the first gen iphone come out in 16gb? Ouch!

 

[The Phazer]

That would be a good comparison if the 3GS was the same spec as the 3G.

...Or if component prices had fallen to the extent that the phones were as cheap if not cheaper to make than last year, as demonstrated by pretty much every other carrier in the world keeping prices between the models the same from their respective launches.

Oh, wait! That is what happened!

Phazer

 

[sonny55]

I have a business account. I upgraded from the original iphone to a 3g the day it was released. Today I contacted my business rep and she originally told me it was going to be the $199 plus $200 early upgrade charge (like was reported on the site yesterday). But then when she plugged it in, it said that I was eligible for the $199. . I've already paid for it and it will be shipped the day it's released.