The new iPhone 3G S sounds great. It’s not a huge update to the iPhone, but it packs a few very important things: More speed, more storage, more battery and a better camera that can do video. It’s a no-brainer to upgrade to it, just as many did from the original iPhone to the iPhone 3G last year, right? Wrong.
While current iPhone owners last year got to upgrade to the iPhone 3G for the fully subsidized $199 and $299 prices, the same will not be true this year. Instead, current iPhone 3G owners only 1 year into their 2 year contracts, will have to pay $399 and $499 to upgrade. The reason for this is simple: AT&T subsidizes the phone down to $199 based on a 2-year payment agreement with the customer. If you only paid one year of that contract, AT&T would have to eat those costs. So instead it’s putting that cost back into this new phone. It didn’t do that last year, because the original iPhone wasn’t subsidized. It makes sense, but here’s why that’s a bad idea.
There are no shortage of AT&T iPhone customers who are pissed off at the company. Not only is their service sketchy at best in many places (I have spotty service in San Francisco, but it was much worse when I was in NYC this past week), but they do things like delay the roll out of features that the rest of the world is getting because they have other providers. And they do things like block the Sling player app from streaming over 3G on just the iPhone, while it works fine on other phones. And they rip us off with text messages (as do other carriers, though AT&T was particularly bad when moving from the original iPhone to the iPhone 3G). The list goes on.
Why this matters is that the dislike of AT&T, mixed with a not huge update to the iPhone and a higher subsidized price could be a perfect storm for users that normally would upgrade, not to. I probably will because the iPhone is integral to my work and I could use more speed and power, but the fact that I’m questioning it should say something. I didn’t question it for a second last year.
But here’s why it’s really a very questionable upgrade: Because Apple is at some point going to move the iPhone beyond the AT&T network. That move could happen as soon as next year. If you buy this iPhone 3G S now, you’ll be locked in for two more years (or have to pay the large cancellation fee). Now, AT&T is trying to negotiate with Apple to extend its exclusive deal through 2011, in which case the move to the iPhone 3G S would make some sense. But that has not happened yet, and AT&T is playing in risky waters. If I learned tomorrow that AT&T and Apple were ending their exclusive deal in 2010, there is no way I would upgrade. I’d suck it up and wait for a year.
That’s why it may have been smart for AT&T to extend an olive branch to current iPhone users and give them the same subsidized price as new users. Sure, they would have taken a hit, probably a fairly big one, but big picture, I don’t think it would be all that bad. First of all, not all current owners would upgrade even at the lower price. Second, if you think about it, it’s not really that big of a hit for them. It’s really only $200 per customer — AT&T makes that off of me in two months with my bill. And if they do lose the Apple exclusivity, they will effectively be losing $1,200 (one year’s worth of bills) that I otherwise would have been paying them.
Instead, basically what it will sounds like to most current iPhone owners is AT&T saying that, “we love you as a customer so much that we’re going to make you pay an extra $200 for this new device since you stuck around with us.” That $399 to $499 for the iPhone 3G S could end up costing you a lot more if Apple moves the iPhone beyond AT&T. And that sucks, because I want it. But I’m very worried it won’t be worth it.
Deal with it, iPhone users. The rest of us have to deal with these same upgrade rules…you are no different!
Wow. That was a harsh reaction. No one was saying anything about these upgrade deals being any different, but just because its the same elsewhere doesn’t mean it should be. AT&T has a deal on the line here. Revenue now, or more revenue in the future if they keep the Apple customer base happy.
Yeah, exactly.
MG, that was a great post, and addressed an issue that is easy to gloss over in the tumult about the new features, etc.
Thank you very much.
Nice video and cam, with thumbnail bar.. Now you can show off pics taken off your iphone. Not really sucker deal
You’re missing part of the equation. My first gen iPhone no longer entitles me to a subsidized handset. It would have last week ($200), but now it would cost me $300. And the 3GS is $400. Is AT&T sure they want me to hang on until December for a discount? Maybe Pre OS 1.5 will be ready by then…
Wait….so your saying that first generation iPhone owners that didn’t upgrade to the 3g cannot get the 3gs at the subsidized price???
You are absolutely wrong. I just upgraded my 1G for the normal subsidized price of $199 for the 16GB phone.
No. That’s not correct. If you login to your ATT account and select to upgrade your phone, it will tell you how much it will cost based on how long you have left in your contract and whether you were subsidized on the 3G. I have a 1G iPhone and it is offering me the fully subsidized price of $199 for the iPhone3GS.
I did log into my account (and I didn’t buy at launch). My first gen doesn’t qualify for the $200 3GS. I bought it in Nov 2007 I believe, maybe Dec. Certainly in 2007. Last week at the Apple Store they said I could get a 3G for $200. Now according to Apple’s page the 3G will cost me $300 and the 3GS will cost me $400. What happened?
I partially retract my comment. Apple Store would have sold me a 3G last week for $200. That was a loop hole and the refurb Blackjack2 I thought was contract free when I picked it up as a plaything last fall extended my contract. :/ The good news is I believe that also bumped me into the new reverse pro-rated cancellation fee. So when I jump to a Pre or Magic, it won’t sting as much.
Exactly what? If the point is that they should “keep the Apple customer base happy”, then the question is “why do Apple customers need special treatment to be happy?” Especially years into the product lifecycle, well past early adoptor stage.
I’m an iPhone owner, but I am not going down the “OMG I’m so special I should get favored treatment from the carriers” route some Apple fans seem to take. Or the self-contradictory, “it’s not a big deal, so therefore AT&T should take the hit because we’re a big deal”.
Seriously, does your logic extend beyond, “they’re a big corporation, and I’m a precious little flower that needs looking after”?
(now THAT’s a harsh reaction…)
i think the point is that any carrier, AT&T or otherwise, should do what is right for the most customers. There are 10 million iPhone 3G phones in America now. That’s 10 million potential upgraders, who will sign a new 2 year agreement.
It’s not that iPhone users want special treatment, but they’re bringing a long-standing problem to public attention, because the iPhone has reached critical mass.
It’s time to end all this crap. Charge me $600 for the phone, fine. But don’t then try to tell me how long I have to use it. I vote to end all subsidies and just buy the phone I want, and let me buy a new one when I want. No commitment.
Jimmy – no, you’re wrong. Every carrier must do what’s most profitable for itself. That only sometimes means giving special deals to customers.
Jon-I don’t consider myself a precious flower, although I like to smell like one. I do, however, recognize that I spend considerably more per month than the average mobile customer. Apple users provide a significantly higher revenue stream for AT&T. That is why they would do well to take care of us. They certainly aren’t winning any friends with the quality of their service. I for one would jump to Verizon in a second if a CDMA version of the iPhone came out.
I agree with the authors analysis. Fundumentally all cell carriers are extorting money out of us for a service that is less reliable than a string stretched between two cups. And I don’t see enough reasons to upgrade, though I’ll pay my $200 cancellation fee the moment I can get an iphone that works on a carrier other than AT&T. A year+ later and we still don’t have SMS messages (jeez – the $50 phone my GF bought 2 years ago does that!) thanks to both AT&T and Apple.
And I 100% agree that I’d be fine with paying $600 for the phone and paying a monthly fee with *NO* contract and no contract breaking fee. Isn;’t that what the insipid $36 fee is to have someone spend 5 minutes typing into a computer and activating my phone is for?
Does anyone know if the cool new Chinese desktop app will be available on the iPhone?
Man, I hope so.
Are you referring to the ability to draw Chinese characters using the mousepad? That’s been available since the original iPhone (or at least iPhone 3g). You just have to enable the Chinese character set in Settings>General>Keyboards>International Keyboards>Chinese>Handwriting On.
No, this is different, kinda science-fictiony.
And it’s guaranteed to get at least a billion users over the next upgrade cycle.
You know that famous Apple 1984 commercial.
It’s like that, though no one’s throwing a hammer this time.
No hype. No joke.
Stop spamming!
jdu,
Don’t be scared.
The new application will get rid of our enemies.
You have no reason to be scared.
Or do you?
MG
did you expect a freebie halfway through your contract?
No company does that. The iPhone is no different.
Uh, did you actually read the article? AT&T did offer subsidized pricing to first-gen owners last year when the 3G came out. This year, they’re not. That’s the point. Try reading.
Uh, did YOU actually read the article? The 1st gen iPhone wasn’t subsidized to begin with. Therefore, the 3G was subsidized.
What about people who still have the first generation iPhone…can we still get it at the subsidized price, if still under contract?
It is subsidized.
Yes, login to your ATT web account and it will give you the price for your upgrade. If you have a 1G phone you should be offered the fully subsidized price.
Yes, 1st gen iphone users will get subsidized pricing because our contract is officially up.. Assuming you bought the 1st gen on release date. This is a great thing to us who didn’t upgrade the first time around and got our lame $50 or whatever it was coupon to apple for getting ripped off in the first place.
For the waiters out there like me I am going to buy the 16gig at $199 instead of $99 3g. I was debating it but 2 years with an updated iphone, endless apps, video, its a no-brainer. But in a year when a new iphone comes out with the upgrades they filed patents for such as video phone calling etc I will be bummed but I waited two years to get a faster upgraded iphone and that is good enough. Bring on cool voice function.. I know there is a voice recognition app, but the iphone’s voice recognition demo on apple.com is just plain SICK!!!!!!!!!
Life is waaaaaaaaaaaaay to short not to upgrade! It’s only money!
I love tech and I pay for it. Forgo something else, but pay now, it’s so worth it!
I agree. $300 is relative. Consciously save for 2 weeks and you’ll accrue enough to cover it. Skip the bar nights, coffee shops, and $100 shoes and figure it out. You’ll be very happy.
However, I digress, if you already have an iPhone this upgraded version isn’t screaming additional value.
I’d love to have a phone like the iPhone, if not the actual one itself. But those prices are killer for someone who wants it, but doesn’t have the money!
Apple’s not going after people who have wants but not the resources.
Verizon doesn’t have inane upgrade rules like that. I can upgrade whenever I feel like it and pay contract prices if I sign a new contract on the spot (effectively starting my current contract over). I know at least seven people who have damaged cell phones (i.e. dropped in water) and gotten new ones at Verizon at contract prices by just starting their contract over, too.
I have an iPhone 3G, but there’s no way in hell I’d upgrade for that much money. I’m waiting impatiently until I can move my iPhone to my Verizon plan, which has reception and international data (novel!).
It doesn’t work like that at our Verizon here. Any time I’ve wanted to upgrade phones, I’ve had to be within 3 months of the end of my contract for them to “re-up” the contract and give me the 2 year phone price. If I’m anywhere outside the 3 months, a new phone is full price and always has been.
Agreed. Verizon doesn’t give this benefit here in the DC area and I doubt it is anywhere else either. That said, I’m on my 5th Blackberry 8830 in my 2 year contract that ends next month because of “issues” with the phone. VZW has never questioned and replaced but there’s a reason there is a “new every two” plan. They don’t give away upgrades. But they will stand by their merchandise (and network).
Additionally, Verizon is much worse that AT&T when it comes to suppressing phone features. Verizon will also brand the iPhone and any available space with their logo for sure. Verizon is my ex whom I dumped from being way to controlling (disabling creating your own ring tones, uploading to your phone, etc). Yes, AT&T’s service isn’t as good as Verizon’s at time but AT&T doesn’t control every aspect of your phone either. In regards to replacement phones, Verizon will replace a damaged phone with a refurbished one for any issues beyond 3 months. In my area they do at least…
So that means we should also deal with the text messages rip-off just because other are doing it? (basically, shut up)
If so, when the hell we will see a change?? Not in my lifetime…
You’ll see change when you quit buying in to the system and convince others to also opt out of the insance pricing systems. However, it’s pretty hard to when we’ve got an effective oligopoly on mobile phone service here (US) and monopolies on specific phone models via specific carriers.
The last part of the article is the most worthwhile point — what if you buy now, AT&T never improves service, like including tethering at all or at a decent price, like it already does on every other internet phone, and Apple goes non-exclusive. Then you will be stuck with a large cancellation fee to move to another carrier.
This deal is aimed at new customers and is not all that friendly toward existing customers. I have a 1st gen iPhone, never saw the value in 3G just for GPS and a bit more, so presumably I can move up. But the chances may be too great until I know: (1) if Apple starts with another carrier; and (2) if I can unlock the 3GS at that point.
The cancellation fee is pro-rated (http://blogs.co...o-pro-rate.html) on AT&T so the $175 fee drops $5 for every month of your contract. Still crappy but not as bad.
I think the bigger problem if Apple were to partner with Verizon next year is that your iPhone is now useless since Verizon doesn’t use GSM. Verizon said its going to launch 4g in 25-30 markets next year (http://reviews....0166622-78.html) which I think would point to an iPhone 4G.
AT&T should give you $100 a year credit. If you waited two years, then you’d get $200, or waited one year get $100. Instead the way it is right now is if you got the iPhone 3G last year, and you want this one, you have to pay full price. Then, after paying full price you have to wait another two years after that. It doesn’t make sense.
Did I miss that “WOW” moment from apple community this year?….
If anyone complains about having to pay out the remaining contract for their 3G iPhone (before purchasing a 3GS); then the only person to blame is yourself. Consider this; most users had a 1G iPhone and a 2 year contract, before deciding to upgrade to the 3G correct only one year later? These users had a legal contract with ATT, that ATT has full intent of making you honor; so why did you agree to a new 2 year agreement? You should have insisted that ATT honor “their” legal binding agreement (which was already in place) for the remainder of the 1G contract; or you would refuse to buy the 3G! Then, the 3G sales would have TANKED; and now ATT would not be sticking it to their customers (again). You all played right into their trap; and now are having buyer’s remorse about the 3G iPhone contract! It’s time the consumers take back control of the market. Our emotional purchasing habits are what make large corporations like ATT rich and allow them to step all over us. Stop playing the “victim” and DEMAND that ATT honor their agreement that is already in place. I personally have a 1G iPhone and have just completed my initial 2 year contract. I wasn’t about to allow ATT to bump my monthly service fees up, just so “I” could give “THEM” another $300 for a 3G iPhone! That’s absolutely absurd! What we need is an international boycott on the 3GS, to remind ATT and Apple that the CONSUMERS control whether they survive in today’s economy, NOT them. If we have a contract in place; they MUST honor it if they expect to continue to keep our interest in the new “annual” release of a new iPhone. Also, they must not create a market monopoly with only one provider. We demand to have choices! Wake up people! Apple and ATT are INTENTIONALLY creating 2 year contracts with a phone that comes out with new revs annually; KNOWING that YOU are going to be spoiled “emotional buyers” and continue to pay TWICE for everything. Twice for each revision of iPhone that is released, and TWICE the service contracts that overlap! You are all playing into their game! Sad.
Seriously complaining about contract clauses is plain dumb. It is actually totally pretentious to believe that just because you have an iPhone you will not be forced to pay more for getting a new phone. Read the contract!
Also with a phone like the iPhone the $100 difference is nothing since you can actually sell your old iPhone on ebay and make up for the difference … well actually you could before. Now that there would be so many of you selling their 1 year old device all bets are off …
There should be NO two year contracts. If these carriers were so good and their service, customer-service too, and handsets we all SO GOOD, then customers would not be hopping around from one to another. I, personally, would throw my iPhone away if it went to Verizon. That company blows chunks. I was personally told, by the secretary to the CEO of Verizon Wireless, that there is no service in my area, there will be no service in my area and “to look at other carriers”. So I did. And I found AT&T and the iPhone and couldnt be happier. If I have to go back to Verizon then that CEO can shove my iPhone up his ass.
Verizon has never learned the meaning, nor the value, of customer service. Their store clerks LIE, their customer service people do not know how to communicate and their marketing team doesnt know the first thing about creating postal mail or email campaigns. They use and re-use dirty data mailing lists and I wouldnt be surprised if that company fell to pieces soon.
Jeff… iPhone users are NOT asking to be treated special. We are asking to be treated in the exact same way as every other AT&T customer. For every AT&T subsidized phone a cusomer is eligable for the “new contract” upgrade price once they have completed 12 months of their 24 month contract. I know becasue I’ve been an AT&T customer and that 12 month window was why I was able to upgrade to the 3G iPhone from my then current highly subsidized (as in free, $400 worth of “subsidization”). But AT&T is now telling iPhone customers that they have to wait an EXTRA 6 MONTHS. We now have to wait 18 months instead of the normal 12 months. On top of that, they NEVER told us of this special iPhone only condition when we signed our contract. They just made it up this week with the announcement of the 3Gs. Again.. what we want is to be treated the same. WE are already being treated differently.
Hello Tom, you are quite confused about the time into a contract to get the subsidized price on a new phone.
AT&T has never (unless you work for a company that has a special contract), offered subsidized upgrades after 12 months. It has always been 18-20 months into the contract. Other factors that are weighed are your payment history and average monthly bill.
And yes, I know this as I used to work for AT&T in business sales.
I agree, but really, an extremely small amount of 3G owners will actually spend $599/$699 for this. I really think this is bad on AT&T’s part and Apple because they will both sell less phones, and Apple will not see as much purchases as last year because everyone loved the 3G and 2.0 and now they cannot buy the new one. I for one, am pissed off. Really Apple/AT&T?? Think about your customers
Oh yea and Apple allowing iPhone 1G upgrades to iPhone 3G for subsided price, but not for 3G to 3GS. That makes me wonder.
well that’s because first of all presumably the first gen iPhone contracts would be up, but also because that version was never subsidized to begin with.
Wonder about what? A lot of 1G owners bought unsubsidised phones (e.g., myself), and the end of the contract should be approaching for many of those who did get subsidised phones. So of course they get the new iPhone for $99.
That’s the double-edge sword of subsidised phones that many people keep forgetting.
What is there to wonder about? iPhone 1G’rs bought their phones with NO DISCOUNT, so when 3G came out, they were eligible for a discount.
Had Apple/ATT subsidized the price of the original iPhone, those that wanted to upgrade to the 3G would have been in the same position that people with 3G are in right now.
But 1G owners still under contract could buy the 3gs at the subsidized price?
It would be cheaper to just pay the $175 cancellation fee (minus $5 for each month into your contract), sign a new contract and buy a new subsidized iPhone.
Though you would have to wait 90 days to be considered a new customer.
That’s what go phones are for
, Break out the pagers people we’re going old school!
AT&T is definitely being shortsighted with these pricing moves. When the time comes to reconsider the contract (possibly now) users will be up in arms (as they are each time things like SMS messages costing an extra $5 are discussed) and protesting that Apple look elsewhere for a carrier that actually likes their customers. I am upgrading to the 3GS because I am still on the original iPhone. I could use all the new features and then some. I also qualify for the subsidized price. The only thing this model did not include for me was a front facing camera. If next year’s model indeed has one then I will be a but disappointed. I am hoping to refrain from upgrading my iPhone each year if at all possible. The launch of the 3G certainly was not compelling enough for me to upgrade last year.
Any other 1st Gen iPhone users who are upgrading?
I’ll be first in line. Ready to preserve my 4GB 1st gen iphone for future generations to marvel at… IMO all cell phone companies are a rip off, just deal with it.
I might, but not whole heartedly because like you said, next year when they launch the 4th gen with front facing camera and OLED we will be stuck with 3Gs.
My wife and I both are still with our 1st gen phones. I’m considering the pre over the 3GS though. I didn’t like Sprint’s service when I was with them years ago, but AT&T really isn’t any better.
I don’t care about the apps to be honest. I really only use the facebook app and reddit. The big draw on the Pre for me is gtalk open and running all the time. That is huge for me as I use it for work and I can stay updated when i’m out to lunch or in a meeting.
I am on the same boat. I paid $399 for my 8GB iPhone 1st gen and there was no reason for me to upgrade to 3G. However, ATT is giving me the subsidized price and the overall additions from 1st generation are more than enough to justify paying another $299 for a 32GB.
Boo Hoo… I paid 599 for my first generation iPhone. Yes I got a 100 rebate from Apple. I have been waiting patiently for this new phone and can’t wait to have that compass! So many times I get out of the subway and don’t know what’s north or south (unless the sun was out).
I have a gen 1 iPhone, when my contract is up in December I’ll have it unlocked and use the same phone but w/ T-mobile until verizon or Sprint begin to ride the iPhone train.
Screw AT&T, their service, and their policies. There is no customer loyalty in this policy. Pure B.S. If you care, follow http://twitter....om/fedupwithATT @fedupwithATT
Actually, as several have pointed out, none of the carriers are (1) customer friendly, or (2) have very good service in all the areas they advertise. As has been said, they all pretty much suck and are greedy.
I’m still holding out for a Verizon iPhone.
Me too. But by holding out I mean sucking it up with AT&T until the Verizon one comes.
The sooner we get the iPhone Gs the sooner the contract is up.
Plus one. I’m six months into my contract and am not upgrading or doing anything until Sprint or Verizon roll out the iphone. As soon as that happens, I’m ditching AT&T, regardless of the costs and moving forever.
Microsoft subsidizes Verizion phones…. wouldn’t that be funny.
Add this to the lack of tether love and I call Apple the Groove Killa…
http://www.groo...xt-iphone-3g-s/
So, a users with a 1st generation iPhone (or something else) shouldn’t upgrade to an iPhone 3GS because there’s a chance that Apple might choose another carrier a year (or longer) from now?
And that everyone who has an iPhone is unhappy with AT&T?
All of the carriers suck in one way or another; there’s no escaping that. For the record, at least in Boston, 3G from AT&T just works. It’s not like what I hear about San Francisco or what I’ve experienced in New York.
The only viable alternative for Apple is Verizon, but that means making a CDMA phone. Yes, I’m aware of the plans for all of the carriers, including Verizon to migrate to 4G technology that works across GSM and CDMA networks, but we’re not there yet. And we may not get there on the timeframe that’s currently out there, meaning Apple would have to make a CDMA device. If you listen to Apple’s conference call from last quarter, acting CEO Tim Cook was clear that Apple doesn’t want to make a CDMA phone if it can avoid it. And it can be avoided by AT&T writing a big enough check.
In the meanwhile, AT&T will have 7.2 Mbps HSDPA later this year available for the iPhone 3GS. And there’s a better chance that Apple will stay with AT&T for the foreseeable future, as that’s the easiest thing for them to do, especially because everything else is vaporware at the moment.
Nicely Put.
If you suck it up and wait only a few years, there’ll be enough WiFi coverage so that you won’t need a cell network! Are you for real?!
AT&T sucks, 2-year contract rules suck worse.
I have been waiting for the new iPhone but I will be damned if I am going to pay $400 for another phone. I will be one less person upgrading this year. And I have a feeling the lines won’t be so long this year.
Yep! Same here. I can’t see too many 3G people upgrading. The features are just not worth $400. I would have paid 200 for them, but it would have been close. This policy has made my decision a lot easier.
yup.
You guys don’t understand… Yeah 3g users wont be in line but 1st gen users will be. and the majority of 1st gen users contracts are just about up. next year when the new iphone comes out u can stop crying and go wait in line.. at least u didn’t get screwed on 1st gen when a new 3g phone was introduced and only had to pay 299 for it when we shelled out 500 and 600 bucks then got a wonderful slap in the face (100 dollar coupon for apple) as compensation for bending over… I will be inline and i might call u on my voice command function this time around (i know there is an app for that) but the iphone 3gs voice feature makes that app look meaningless
Please answer this question, regarding video:
Can the new iPhone REALLy capture video? Like my Nokia N95? So will this phone stream live video to the web via Qik, Kyte, etc? Or is this something different? If the new iPhone really had video capability, in the same vein as the N95, that would have been the lead story on today’s update, so I think I just answered my own question.
When the iPhone can take video and pics like my N95 (it has a 5 MP camera), and is open to Verizon or AT&T, that’s the time to invest in a new one. Game over at that point.
I’m curious about the video features as well. i enjoy qik, even if it is slow often and crashes, but still …
based on cost and unknown video features as well as horrible coverage in NYC i’m thinking of waiting for verizon.
nothing has been stated by Qik but Apple did state that apps could access the camera via API. I suspect we will see a Qik app sooner than later.
Wouldn’t this be a better solution:
1. Pay the early termination fee of roughly $115-$120 after 12 month of service.
2. Sell the used iPhone 3G. Would probably bring back $100-$200 since it has no strings attached.
3. Get the new 3GS AT&T contract for $200.
Sounds like $115-$$220 for an upgrade to me.
– Ron
A bit more complicated, but yes, good idea.
someone checked into that in the US, evidently AT&T forbids you from signing up with a new contract for 60-days after you’ve cancelled.
denied.
Nice, thanks.
that wont work if you want to keep your current number.. when you sign up for a new service you cant bring your old number within a carrier only if you switch carrier as well..
Also a good point.
One thing you could do if you have an AT&T Business account is add a second line to the account. You’d get the subsidized rate for the iPhone 3GS, then cancel the other line after you activate the new line, pay the termination fee and sell the old iPhone.
nice. you wouldnt get your same number… but, that’s what google voice is for, right?
PS: MG, great writeup. I was so ready to buy a new phone today, but, same as you, I’m questioning it now. Figured I’d sleep on it.
Yeah, I already have my Goog Voice number on my business cards for this type of carrier BS
Read my mind!
I have Google Voice for unforeseen carrier shenanigans as well.
Yeah. I have my google voice account…. oh wait. No I don’t. Aahhhhhhggg. God, I hate you guys.
Awwww, I want Google Voice and I’m not a Grand Central. Any idea when it will be released to the rest of us?
ditto
I’m pretty sure if you unlocked it you could sell your old 3G phone for $200 and then buy the upgraded 3GS for the $200.
I live in NYC, in Queens. The service I would rate a “B”. Its definitely has not been spotty for me the past year, but I do have problems with it and I also dislike AT&T. Traveling around NYC, I don’t have any real complaints about coverage… problems only arise if you get deep into a building (like a hospital) then service is an issue.
Is that really you mike? its me Karen
Judy Blume reference?
The radiology floors have lead walls.
Uh, why not:
1) Pay full cost for new phone (-$399)
2) Resell current phone
Isn’t the ETF $200 anyway?
I believe the ETF is $175 and goes down $5 for each month.
Why not just sell your old one and use the money to subsidize the cost of the new one? Why bother with all the cancellation garbage?
The upgrade should be free, from 3G to 3GS. That is so wrong.
ORLY? New hardware and all that jazz for free? LOL. Please step back into reality.
Well articulated. There isn’t a single compelling reason to upgrade, and there are several very good reasons not to. The lack of tethering blows my mind. AT&T blew it, and with Apples push into the lower end of the market I’d be surprised if they renew the contract. It’s good bargaining leverage when negotiating with the other carriers though.
OTOH, I played with the Pre, the UI is slow as molasses and the battery life is weak. Looks like I’ll stick with my 3g until my contract is up then reevaluate.
@es
I own a Pre and was comparing it with my friends iPhone side by side and I’d have to disagree with the speed being slow. Its quite the opposite. It screams. I jumped from app to app with a flick of my finger while my buddy shutdown app after app, restarted them, got back to where he was, etc. None of that had to be done on my Pre, I just flicked my finger and paged through the ten cards I had running.
The UI is amazing and super intuitive. Everyone I handed it to at work picked up on the paradigm in about a minute. The camera takes pics so quick, I can finally get my 4 and 8 year olds in shots without blurring and missing the moment. No phone comes close to it.
When WebOS starts rolling out on 8+ different phones on multiple carriers, I think the volume of apps being developed is going to skyrocket. Desing one app that runs on a ton of different phones that don’t suck? Bye bye Miscrosoft WinMo…hello WebOS.
Thats right the PRE is quick and has an incredible UI… I love it
I would love to know where you played with one. Some apps require an EVDO connection, some don’t. If you were in an area that had poor Spring coverage, then that’s why the apps were slow. That’s a Sprint issue, not WebOS.
The UI is great and it is super fast. I agree with Drez. Once this OS gets on multiple phones on multiple networks, we will see the power of this platform
I like how they offered the 3G for $99 to under cut the Pre.
Apple has them down… just beat them up….then Apple just went and stuck their gum in Palms hair just to be mean.
Actually, instead of subsidizing an incremental upgrade to my phone that will be stuck on a crap network, how about they actually fix the network?
The MMS thing in particular is completely retarded. They have everything in place to support it. From what I’ve heard, it’s all just a billing issue of them having to go through and manually change everyone’s accounts to opt back in to MMS support. How stupid does that sound?
And tethering is a joke too. It sounds like AT&T heard about this stuff just a few weeks ago, which doesn’t make any sense. They have to be the slowest company I’ve ever seen. They keep shooting themselves in the foot in the most obvious ways possible. Some kid fresh out of college with a business certificate would be a better manager of their wireless division.
I had AT&T when they did wireless stand alone. Actually I’ve had all the carriers at one time or another. When I went ot Cingular I was pretty pleased for the years I had them. Then AT&T bought them out and it’s starting to look just like they were before. As much as I’d hate to have to be pegged with Sprint or Verizon again, I’m going to take a hard look.
So what service would you like to see the iphone one? Verizon, Sprint….etc
I’d (gulp) hyave to pick T-Mobile since they use GSM. CDMA is going to eventually die off.
Yes.
But we were different… until now.
Great article Paris. iPhone users are the cream of the crop. We spend the most on a monthly basis and contribute a lot to AT&T’s bottom line. I told myself today that I won’t be upgrading and didn’t even think about the points you mentioned here.
It’ll be be best for people to hold off from upgrading. Its not worth it right now. At least wait till you are eligible for the low price points or see if AT&T/Apple will continue their relationship.
True. Boycott AT&T otherwise they will have all the reasons to continue to milk their customers.
Good heavens.
The sense of entitlement that iPhone users seem to have is *massive*.
To extend this logic, one would have to argue that *any* smartphone user (Blackberry, Windows Mobile, Symbian) should be able to upgrade whenever they want a shiny new toy. All smartphone users pay the same inflated prices for AT&T plans, don’t they? iPhone users aren’t as special as they seem to think.
You signed a two-year contract. Never before in the history of the subsidized two-year contracts have users so readily expected to be able to upgrade in one year. What makes iPhone users so unique, other than their “special little flower”-ness?
I paid for a two-year-contract subsidized Tilt on AT&T’s network, and had no expectation that I could upgrade to the newer model (the Fuze) a year later. Why would an iPhone 3G user have the same expectation now? The math that AT&T (and Apple, let’s be fair) used when making up those subsidized prices was as valid the day you signed the contract as the day you decided you wanted a new iPhone 3GS.
Besides, you *do* get a $200 discount on the new iPhone, when compared to the totally unsubsidized cost.
It’d be great to see Apple on other networks. ATT doesn’t even support tethering yet; that’s a loss in revenue as well.
This combined with Apple removing the ExpressCard slot from MBP is a real pain. You wouldn’t think the two were related but I think Apple removed ExpressCard with the idea that you tether with your iPhone instead of using a card.
Too bad, because I won’t be getting a new MBP again until they add ExpressCard back in or a new iPhone until it’s on something other than ATT.
Nobody really *needs* video that doesn’t already have a flipcam and ATT is the worst and most expensive carrier. (I gave up using it in NY)
Oh my gosh, this post sums up everything I have been thinking since the keynote, particularly your last paragraph.
I really want to upgrade my phone, so why is AT&T punishing me for wanting to renew a new contract?
Thanks a lot AT&T. I spend my hard earned cash on your lame-ass service and I commit to a contract, then when I am willing to renew it again, YOU WANT TO CHARGE ME 200 DOLLARS, FOR ME TO AGREE TO PAY YOU FOR TWO MORE YEARS!?
Are these people retarded?
A valid point made in this article.
This decision by Apple and AT&T has put me on the fence to even eating the cancellation and moving on to a new carrier completely.
This is exactly the voice of average consumers that big guys like AT&T should listen. In fact, the entire cell phone industry is still way over priced and our consumers are pretty much pissed off without other options.
Ah! A journalistic piece on the Iphone! Unlike that 4 minute Apple Informercial I just watched on Cali Lewis’ website on her latest GeekBrief podcast.
You could have closed your browser window at any time during the podcast.
The last line of your post has me worried! I never thought you would say that about the iPhone, at any cost
.
Contrary to all the horror stories I keep hearing from iPhone users about AT&T service, it works great with my Nokia. Wash DC/Northern VA area. Is Verizon that much better? Really?
Verizon coverage in the NOVA, DC area is so much better than ATT that its not even funny. You see all those people on the metro talking on the phone – Verizon.
what i meant to say was..
terminating you current plan and getting a new plan wont work because then you lose your current phone number..
number porting only works if you switch carriers..
When I look at my AT&T account it say I can upgrade on the first anniversary of my 3G purchase – not in another year. I think people need to wait and see what the actual policy is before making assumptions and commentary.
I upgraded to the 3G on launch day after having bought the original iphone. But it says I’m not eligible for the upgrade prices for 3Gs until December ‘09. Tells me I have to pay full retail. No way that’s happening.
This trollcat sums up my feeling about the new iPhone: http://trollcat...ngled-sedative/
If cost is an issue I’d suggest getting a higher paying job. I want to latest and greatest and im happy to turn away while the register goes “ding”.
#ttw
I wish AT&T would take that extra cash that they’re making from screwing over their customers and invest in a better network!
Exactly! This is what I was thinking. I’d be alright paying some extra if I could actually trust them to get their sh!t together.
i don’t understand why the upgrade should be free just because its an iphone? if this is the case then shouldn’t it apply to all phones ATT offers? and if that was the case you could just keep renewing your contract every few months or every month for that matter, and then expect to keep getting a subsidized price for a new phone.
Beat it Nokia fan boy….iphone users are special and deserve to be treated to a new phone every year!
or Apple could lower the price it charges AT&T for the phone … hahahahaha
I don’t really understan why all the 3 G people are so upset. You all signed a 2 year deal and accepted the lower price phone when the 3 G came out, others like myself didn’t because I knew the history of Apple and you should have known this was coming. In 3 years, 3 Iphones have been released. You all decided to take the chance, you bought the other phone now you have to wait your turn, like I did, to upgrade.
I bought the new phone today, it cost be $299 plus $18 activation fee. My contract is up in october and it will be here on June 19th. I can’t wait.
If you don’t liek your AT&T deal then pay the price to cancel your contract, but when the Verizon 4G comes out next year you will be all pissed off that you bought this phone. Apple should upgrade their phones every two years, but like the IPOD they know us techno geeks will pay the bragging rights price to have it NOW.
If they woud have said today that you could switch to Verizon, would you not pay the price to do it? This would have happened regardless of the company that you had a contract with. I hate my AT&T service and can’t wait for Verizon, but until it happens, you have to play by their rules.
Cowboy up and deal with it.
I think we know why AT&T is doing it — makes sense. BUT given their issues and the lingering possibility of no more exclusivity, I’m just not sure it’s a smart play for them to not offer current users that deal.
But giving in to your users on unreasonable demands isn’t necessarily beneficial considering the precedent it would set. All carriers work the upgrade routine regardless of the phone (the freebies to those more expensive than the iPhone) and customers are only allowed to upgrade within the time frame set by them. This isn’t a new policy for any company and it’s not like it’s AT&T exclusive.
To allow current iPhone 3G customers the ability to upgrade at the subsidized price sets a precedent saying that this is something they’ll do every time. As you stated in the article, there was a reasonable point to subsidizing current iPhone users when the 3G launched, but there isn’t for this model. Just because Apple/iPhone fans aren’t happy with AT&T’s service, it’s not a reason to offer this.
Considering how quick the masses love to jump on the hate wagon against a company, how long do you think the customers would hold AT&T in high regard for making that offer? Not very long in my opinion. They’d get their subsidized phones and then a few months later be complaining again.
Most people sitting on AT&T that are complaining love Apple products or the iPhone enough that they’ll stay there. AT&T knows this and contractually they’re set. There isn’t going to be a mass exodus and the likelihood of a CDMA iPhone is pretty low (considering they’d have to manufacture dual models only for the one US CDMA carrier). At most, and this is pretty unlikely as well, they’d move to T-Mobile (the only other major GSM carrier in the US).
Free? Why should it be free?
I upgraded from 1st Gen phone today. Received nice discount.
If Verizon becomes a reality of ‘10, I’ll pay the cancellation fee. Good connectivity will be worth it.
Android is looking pretty good right about now.
On Verizon… yeah… But T-Mobile is a turd. Even more of a Turd than AT&T is a turd… Trust me.. AT&Ters complain that they arent Verizon… But TMobilers complain that we aren’t AT&T… logic dictates… shut the f*ck up… you don’t know how bad you really have it.
yup. agreed. I’d buy the g2 on launch day if tmobiles 3g worked as advertised in my area.
It is a recession, but there are probably plenty of gadget freaks who will pull the trigger on the new phone. Even MG, who raised the issue, is going to get a new 3GS.
The phone market is so big, though, that I’ve got to believe the new account still holds sway over the existing (even accounting for the sheer amount of iPhones that have been sold). AT&T knows their hardware differentiation isn’t going to last, so they need to focus on locking in as many new accounts as possible now. And AT&T still has the option to sweeten the offer in the future if a backlash develops.
Does it suck for existing 3G owners? Sort of. But you’ve got to admit that smartphones, in general, have a gotten a lot better, particularly with WebOS now in the mix. Once the exclusivity deals expire, I’m looking forward to a more competitive marketplace.
http://notestos...-and-iphone-3gs
True, and I said I probably would just cause I’m so reliant on it for work, but otherwise I honestly don’t think I would. I’d wait until I knew if Apple and AT&T were going to extend that deal.
I left Verizon for AT&T when the BOLD came out. And quite frankly, it was a big mistake. Im tired of calling AT&T to remind them that i DO have an International rate plan, and why the f*** is by bill $500 every month…. Anyway.. just left them and i got myself the Palm Pre… So far so good.. but its only been a day. I hope i dont regret it.
You went from Verizon to AT&T then to Sprint?! I think you are in for a ton of regret! I’m on the opposite trajectory. I bolted from Sprint the first day I was free of their contract to get an iPhone. Now am hoping that Verizon and Apple kiss and make up. I have first generation iPhone and probably won’t sign a new contract in the fall?
I kept my 2G around instead of upgrading to 3G and even I’m pissed about the fine print from earlier this afternoon.
I’ve had AT&T for almost 10 years now, next February (since I was in high school, from Southwestern Bell to Cingular), but at the rate this “customer service” is going, I will gladly make the change over to Verizon if the Apple/AT&T contract expires next year—and I never thought I would say that.
Don’t even get me started about the tethering issue.
Everyone is complaining about their customer service. I hate AT&T for their dropped coverage and calls, but I have not talked to anyone in their service in the 2 years I have had my Iphone. Never had an issue with my bill. Whatever I need to do I do online and I don’t need to talk to them.
What type of issues do you all have when you talk to them? What problems I mean? Just curious, since I have never had problems.
Dana,
I have specific areas that I drive through that are well-known for no coverage. I think the network does well in bigger cities, just not in areas that are a bit less populated. The call just drops. It’s become a joke quite frankly with people saying oh, you must be by “such and such.” They have AT&T too and know all the bad areas. I’ve been with AT&T for several years…I complained about it every month for two years getting them to credit my bill for dropped calls…I’ve finally given up because they have corrected some areas but not all. I’d drop them now if the iPhone had the Telenav voice navigation applicaton and Slingbox on the Verizon network. Too much to ask, I know. I worked for an American company who “upgraded” service providers and phones yearly. We had AT&T, Sprint, Verizon and Nextel while I worked for them. Verizon was the definitely the best and that was 6 years ago.
I’ve ordered my iPhone 3G S. Can’t wait!
This year I’m not waiting in line 10 hours though, as still unsure if I will have issues with FAN # (last year i was in line ALL NIGHT and couldn’t get one after all that).
$499 sucks, but oh well, I made MONEY selling my first gen iPhone last year… can probably get $200 for the 3G one.
Toys!!!! Yay!!! Video!!! Cut/Paste!!! HSDPA!!!! MMS!!!!
MG’s right. I love the iPhone, but having AT&T as the carrier is a grind. If there is a reasonable prospect of moving back to Verizon in the near future, I’ll pass on the upgrade for now. New iPhone has got some nice-to-have features, but no need-to-haves.
A missed opportunity for AT&T. I’ll wait for the next one, but likely only if Verizon is the provider.
Don Roberts
@DonRoberts
I used to love Apple products. Will continue to use the computers but no iPhone for me if I have to pay through the nose for phone and data services!
> it’s not really that big of a hit for them.
>It’s really only $200 per customer — AT&T
> makes that off of me in two months with my bill.
You assume AT&T has 100% profit margin, which they do not.
It costs a lot (an understatement) to build and maintain a cell phone network. It’s possible they will never make back that $200. Which doesn’t mean they still shouldn’t do it as a loss-leader; but lets be more accurate with the costs involved.
at&t made 12.9 billion net profit last year….and 12 billion the year before, if memory serves me correctly. I think they can handle it.
I don’t really think you get it. It doesn’t matter what the profit margin is. All that matters is the amount money he is paying.
I’ll bet that in their (in)finite wisdom, AT&T thinks that by not giving the price discount it’s locking you iPhone fanboys in for 2 more years despite the fact that Verizon will offer iPhones this time next year. I simply won’t buy an iPhone until it is offered by Verizon, even if that day never comes.
Why? Switch to T-Mobile? No 3G. Verizon? They’re known for how much they love phones with completely free apps and non-Verizon ringtones. AT&T sucks but what’s this amazing alternative we should be excited about.
MG,
You COULD use the FREE unlocked Android Ion phone you got at Google IO the other week
,Michael Martin
GoogleAndBlog
HAHAHAHAHA…. yeah MG. Or EBay the f*cker like I did…
same here in Germany. T-Mobile contract gives you nothing. Im having 3G with T-Mobile contract and Base sim card in with fantastic flatrate (landlines and internet)
So basically Im on 2 contracts for one phone but all together i dont spend more than 80 € / month.
I will wait for 3GS to be available in Switzerland where I can buy it officially without contract, unlocked for probably 400-500 €.
The Pre is looking pretty good right now. I’m totally disgusted with AT&T. Been a good customer for 10+ years, yet I have to pay THEM to keep me as a customer… seems very wrong.
I couldn’t agree more. I have been a volume ATT customer, and since Nov am on my FIFTH Blackberry Bold, due to dropped calls, etc. 8800 was great – this one stinks. So they won’t replace the phone with something comparable. just another Bold. #6 coming up. Once this contract is over… I am done, even though I love GSM…
What US phone provider is NOT AWFUL?
I don’t know which glamorous knight is riding in to rescue iphone users from at&t – I think the answer is no one.
I’ve been on verizon, t-mobile, at&t in the last ~5 years … aside from the verizon network having better coverage in some spots, I can’t think of anything I hated less about any of them. Awful service, support, lock-in, etc across the board.
have a jailbreak iPhone 3Gs
Liar.
sure buddy. and your momma is a virgin. why get a 3gs when the 3g will do the same shit other than the compas.
Does anybody with a mobile phone really have any loyalty to their carrier?
AT&T has their iPhone monopoly, but when they don’t I can’t think of anything they could do that would stop me from switching to another carrier if they provide a cheaper plan for equivalent service.
True. The only reason I’m hopeful for Verizon is that my entire family is on their network. Sprint’s website and “customer service” is horrible. Their mobile broadband was excellent until they applied the same restrictions as every other carrier. I think Sprint is in serious trouble of going out of business. AT&T has an awful network but has the magical iPhone and a great website. AT&T’s prices stink.
Aaaaaaamen! I am getting fed up with ATT. It wouldn’t take long for ATT to change their ways if apple opened up the iPhone to other carriers in the US. I think hoards of people would run to other carriers given the option. Until then…
Who knows, when the time comes up in December when I “may be able to upgrade” for the subsidized price, someone might come out with a cooler, sleeker phone that might want me to ditch the iPhone + AT&T altogether.
AT&T should rather want to lock me into another 2 years as soon as possible.
Why when they don’t make any money off you? If they upgrade you every year they surely won’t.
No one forced you to pick up your current iPhone at a subsidized price in exchange for a two year contract. If a year later you want them to subsidize another new phone you will no longer be profitable to them, so why would they even want to keep you around? It’s nice of them to offer you a discount.
You don’t hear Blackberry users crying about how they signed a two year contract in exchange for a subsidized phone. Oh wait, they actually understand business.
That said, it would probably be cheaper for you to cancel your current contract and get a new iPhone with a new one.
What I do hear from a lot of my Blackberry friends are complaints about usability and the phone breaking. None of my blackberry friends really ENJOY their phones as much as I do nor do they do as much on them. Just sayin.
No one forced you to pick up your current iPhone at a subsidized price in exchange for a two year contract
Ignorant… A contract is an exchange for value implied. If ATT holds itself out as a viable carrier with signal coverage in most areas, great. When it fails to provide even close to reasonable value, they have broken the contract. A good dose of open competition accross the board would bring the wireless industry to step up their game.