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AT&T: 3G Upgraders pay $200 more for iPhone 3GS

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By Jeremy Horwitz

Editor-in-Chief, iLounge
Published: Monday, June 8, 2009
News Categories: iPhone

AT&T has announced that the upgrade prices for iPhone 3GS will be $399 (16GB) or $499 (32GB) for customers who are still under contract after purchasing the prior-generation iPhone 3G, a $200 premium over the “standard” iPhone 3GS prices of $199 and $299. Using a pricing configurator found on Apple’s BuyiPhone.Apple.com web site, users can find out their individual upgrade prices based on the remaining length of their AT&T contracts, which may be higher or lower depending on the date of their prior upgrades. Users must commit to a new two-year contract; an $18 Activation fee and a $18 Early Upgrade fee are also assessed.

Updated: Some readers have reported upgrade price quotes of $599 (16GB) or $699 (32GB), which may be based on the length of their status as AT&T customers, and their more recent purchase of iPhone 3G hardware.

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Comments

41

You can’t cancel the contract because they have a three month waiting period before you can sign a new one or some such nonsense.

I went through all of this last year and have been waiting very patiently for when I would be “upgrade eligible”.

I knew this was going to happen. A lot of iPhone users are going to be rather ticked off when they find out about this, but the reality is that this is how it works for everyone… the only exception were 1st Gen iPhone buyers who didn’t technically get a subsidized phone. iPhone 1G owners beat the system. iPhone 3G owners have to play by the same rules everyone in the United States has to play by.

Yes it sucks, but it shouldn’t really be a big shocker.

Posted by ort on June 8, 2009 at 2:43 PM (PDT)

42

I already own a iphone 3G,  How much will I pay if get the new iPhone 3GS and adding a new line as family talk with the regular rate?

Thanks

Posted by Hansel Jr on June 8, 2009 at 2:43 PM (PDT)

43

Let me perfectly clear about something: I am fully aware that AT&T;*can* do what it’s doing. I’m fully cognizant of their ultimate objective, which is to *make money.*

That said, AT&T;would be wise to look back at 2007, when it was announced that Apple would debut the iPhone and have an exclusive partnership with the carrier. People moaned and complained then about AT&T;‘s allegedly poor service. So you would think that a corporate behemoth would latch onto this and try to make believers out of the naysayers. Make the pricing structure fair. Make the coverage area broad. Make the plans simple and accessible.

Consider also that at the launch of the original iPhone, AT&T;ingeniously paired with Apple to make the device available for in-home activation. And also consider that AT&T;spent considerable sums improving its infrastructure, most notably beefing up EDGE so that iPhone users would see the benefits of an improved network right off the bat.

Since that time, AT&T;has acted like it wants to kill the goose that laid the golden egg. The launch of the 3G was horrorshow and pricing plans were confusing. You couldn’t activate at home anymore. The anticipated expansion of 3G coverage hasn’t been nearly as widespread as hoped.

Now they seem perfectly content to stick it to 3G users who would very much like to upgrade. It can easily be inferred that they wanted the new device to be released before July 10, 2009 so that they could reap the benefits of this $200.00 upgrade charge. And sure, there’s a sucker born every minute, and that’s a shame, but it’s also a shame that AT&T;can’t exercise a little discretion in how it deals with existing customers. My goodness, they won’t have the iPhone all to themselves forever, and I think it’s fair to say that people love the device far more than the service, so why would they take steps to annihilate users with this sort of tactic?

Posted by Flippy Hambone on June 8, 2009 at 2:57 PM (PDT)

44

I have an original iPhone with some months to go on the contract, and all AT&T;wants from me is an $18 upgrade fee, and I get the $99/$199/$299 pricing. That’s pretty reasonable, IMO.

For all the 3G complainers, ask yourself: Do I really need to get the 3G S as soon as it comes out, and do I really expect AT&T;to subsidize my craziness? You’re completely entitled to be crazy about this, but AT&T;‘s entitled to capitalize on your mania.

Posted by orgel in Falls Church, VA on June 8, 2009 at 2:59 PM (PDT)

45

Sadly, not realizing they were on the verge of releasing a new Iphone, I switched from Alltel to AT&T;and purchased my first Iphone 4 weeks ago.  I can tell you I feel like a dumbass and am not at all happy about seeing my phone upgraded this soon without a financially feasible way for me to get the upgrade.

Posted by Rkmcdon on June 8, 2009 at 3:02 PM (PDT)

46

you guys think thats bad, heres my situation. Ive been with T-Mobile for 5 years.
I received a flyer from AT&T;in the mail for a free
phone and activation and shipping waived. i called
just to see what i would pay, so i decided to switch
over from T-Mobile because the 16GB iphone came out
to $299.99 plus tax. thats it no other fees. this
was on friday 2 days before apple announced all
this. and now i see they offer the old 16GB iphone
for $149.99 rather then $299.99 which is what i paid.
I called at&t;and they told me they couldnt do anything
as far as a discount or cancelation of phone.
he adviced me to refuse the phone but if i do that
i wont activate my service and the deal i got will
be canceled. so now i eat $299.99 and if i want the
new iphone 3Gs i will have to pay like $500 or $600
bucks…..is this the type of service i should expect
from AT&T;? i should have stayed with T-Mobile
atleast the android was getting better :(

Posted by G-Ron on June 8, 2009 at 3:07 PM (PDT)

47

I have a first gen iPhone, and my contract is just about up (was there on the original launch day in 2007), and AT&T;is telling me that I have to pay $699 for 32GB phone.  What are they on?  Obviously I’ll wait until my contract expires, but are they serious?  I’m 3 weeks from expiration and they still want a full premium from me?

This makes me think twice about renewing with them.

Posted by Chris on June 8, 2009 at 3:07 PM (PDT)

48

@ Flippy - It annoys me when people complain without doing a little research.  You starting off by announcing how you were an attorney, if thats true you would have looked at the contracts before making your comments.  Once signed you are bound by them, good faith doesn’t come into play when you get a price break on a device for a specified length of ownership.  If you really think you have a solid case take ATT to court and let us know how you make out…

Posted by Steve on June 8, 2009 at 3:14 PM (PDT)

49

Chris #47:

I think you’re mistaken. If you upgrade before your contract expires you pay an $18 upgrade fee and get the new-customer pricing. If you wait till your contract’s up ... no $18 fee.

Check out buyiphone.apple.com for the definitive answer.

The “gouge” pricing (one corp’s gouge is another corp’s profit opprtunity) only applies if you’re less than 18 months into your contract, which applies to a large subset of 3G owners and to hardly any original iPhone owners.

If the outraged are going to blame someone, blame AT&T;, not Apple. AT&T;are the ones doing the subsidizing (or not, as the case may be).

Also, for the outraged waiting for a Verizon iPhone, don’t expect to see one before Verizon’s 4G network is rolled out. I’m thinking at least another 12 months.

Posted by orgel in Falls Church, VA on June 8, 2009 at 3:20 PM (PDT)

50

While I do feel a little bad for people who JUST bought a iPhone 3G, the writing was really on the wall. Every Apple, iPhone and tech related site on the internet has been buzzing about new iPhones this summer. Anyone who even did 30 seconds worth of online research would have known to wait.

That said, yeah it sucks, and I know everyone isn’t as up on these things… but at the same time. Come on.

Posted by ort on June 8, 2009 at 3:23 PM (PDT)

51

Steve, I’m SO terribly sorry I annoyed you, because after all, my primary goal here is to keep your delicate sensibilities in mind at all times. I am indeed an attorney, your doubts notwithstanding, and I have looked at my contract with AT&T;many times over the years. It is silent as to AT&T;‘s obligations to offer a subsidized upgrade but more to the point, the boilerplate contract is not the only document that memorializes my relationship with AT&T;. In fact, every month, I get a phone bill from them and I pay it promptly. I’ve done this for years and have never had any grievous issues with them.

In this case, “good faith” does indeed come into play when a company knowingly takes full advantage of customers in this fashion. It is not fundamentally wrong to expect someone to pay the upgrade fee if he or she purchased a 3G only a few weeks ago, but for those who purchased at launch last year and held firm in their commitment to the contract and the relationship, it is a classic case of twisting the knife. The equipment subsidy is no generous gift by a benevolent company, but merely an inducement.

I never said once that I have a “solid case” against AT&T;. I said that in my profession, I have some knowledge about good business practices and about parties’ obligations under contracts. I feel that AT&T;is abdicating its responsibility to its customers by making them fork over that sum of money in addition to signing a two-year extension. If they were to request that premium price and no contract, it would be understandable and tolerable.

Posted by Flippy Hambone on June 8, 2009 at 3:31 PM (PDT)

52

Just an added point: we’ve all seen the teardown costs of these iPhones, and we know that even at the “subsidized” price, AT&T;and Apple are turning profits. Let’s be realistic—AT&T;would get iPhone upgraders year after year, and get contract extension after extension as a result, with just a little bit of consumer relations-savvy pricing here.

People who love the iPhone will buy a new one every time Apple puts one on the market. But if AT&T;throws up arbitrary impediments to that, it hurts both companies.

Posted by Flippy Hambone on June 8, 2009 at 3:37 PM (PDT)

53

Maybe I’m misunderstanding some of the outrage about upgrading from the 3G.  If the release date of the 3Gs (or is it 3GS?) was the same as the 3G last year (12 months on the dot) would all you early adopters still have to pay the $200 premium? 

If that is the case then maybe you should be mad at Apple (not just AT&T;) since they (Apple) were trying to get the phone out as soon as possible to prevent people from switching away from their products to another carrier/device (ie Sprint/Pre). 

I understand there has to be a period of time between receiving subsidized phones from the same carrier, but maybe the compromise could be that they need to adjust that interval for iPhone owners to 12 months instead of 18 months given how frequently Apple appears to be offering new devices.  That way they keep people locked into their service but also keep them happy.

Posted by TosaDeac on June 8, 2009 at 3:50 PM (PDT)

54

I was pissed off at first especially since I can’t upgrade until March of 2010.  I bought the original iPhone and the 3g when they first came out.  I have owned Macs since the 128k in 1984.  I had so much trouble with dropped calls or not being able to make calls with the 3g that I canceled my AT&T;contract and went with Verizon.  Then I bought another iPhone in March of this year.  So I am not able to upgrade until March of 2010.  But I am sure I can sell my 3G for $399 on eBay for people who want an unlocked iPhone so I ordered the 16GB at $399.  Not the end of the world. 
Having said that is is really stupid of AT&T;to do this.  iPhone customers are primo customers because they pay a lot every month for voice, data and text messaging.  The percentage of cell phone users who do this is actually pretty low.  Yet they are willing to piss off their best customers and incur negative press during the launch of the 3GS for what?  Its just stupid and unnecessary.  Last year it was the activation debacle and this year will be known as the screw your best customers debacle.  I can’t say I’m surprised by anything a cell phone company does but this takes the cake.

Posted by Terry on June 8, 2009 at 3:51 PM (PDT)

55

Flippy, those teardown costs are silly and are about as useful as consulting a Ouija board to determine the cost of any phone.

On another note anyone who thinks Verizon will be more customer friendly has not had Verizon.  They milk you for every last cent as well.

Posted by Terry on June 8, 2009 at 3:53 PM (PDT)

56

Normally I am the one defending AT&T;...not because of their coverage (I get at best a bar in my home and normally get no reception at all even though their map shows I am dead center for 3g speed in my area) but because of the iPhone and that I can go to places like the hospital here and get free wifi (because of my DSL not because of cell).

I don’t have a huge issue with the $200 ding they want to charge me as a loyal 3g customer to upgrade, I actually expected that…it’s everything else that seems to be happening lately with AT&T;that is getting me more and more upset and this is just one more thing.

What’s really stupid about not letting iPhone users upgrade without the $200 fee is they say for me as an example that I can’t upgrade until March 2010…I would have upgraded as soon as possible but now I might as well wait and get the next iPhone that will come out next June. Basically they are losing the money I would pay for the new phone since I will wait it out, not to mention I would have given my old phone to my daughter and been paying for two iphone contracts which is a lot more then I pay now (she can’t upgrade either without the $200)

Other things they have done in the last couple months:

1. No MMS right now for AT&T;. It’s not like I would get it right away because of my upgrade issue but it seems to me they are going to charge us extra for it.
2. No tethering announced, yet other companies with the iphone get it.
3. The whole sling player fiasco. iPhone users don’t get to use the 3g networks to watch their shows but someone with a blackberry can? Talk about getting the shaft.

A lot has been written about how the iPhone nearly by itself kept AT&T;from having a bad quarter and yet they are basically saying thanks for all the money you are giving us, we will repay you by charging for every little thing we can while at the same time not giving you the ability to use your phone like we let other customers.

I read rumors of Apple talking to Verizon about a tablet device and possibly a new type of phone not to mention that AT&T;is trying to keep the iPhone exclusive for them even longer. Seems to me they are doing everything they can to tick off Apple and it’s iPhone customers (As they should know, if the iPhone moves to another carrier most users will go with it).

As soon as the iPhone goes on another network I doubt many people will show loyalty to the network and jump ship.

Posted by mcallender on June 8, 2009 at 4:01 PM (PDT)

57

46, I called att and they advised me to just return the fee, lose the 10% restocking fee, they would give me a sim card to use with another phone until I can get a 3gs, and then when it comes out just buy it at the normal price, in fact they told me i have 30 days so I can wait until the day before, use my 3g until then and then go to the apple store and hey presto!!!

Posted by Andy on June 8, 2009 at 4:17 PM (PDT)

58

You are all whining about something that will be the same regardless of what carrier you go to.  Cellular providers have worked the same way for a long time.  You sign a contract, they give you a discount on the phone.  You got a discount on the iPhone 3G when because you signed a contract, and once that contract is near the end of the term, you can get another discount off a new phone.  If you remember with the original iphone, there was no subsidized price, which was why you could buy the iphone 3G at the discounted price.  The phones are worth way more than what you pay for them, why do you think they are the same price as an ipod touch?  When verizon finally does get the iphone, they will operate the exact same way; “new every two” ring a bell.  ALL CELL PHONE PROVIDERS WORK THIS WAY!!! Quit complaining, and deal with your measley little iphone 3g.

Posted by jayo on June 8, 2009 at 5:23 PM (PDT)

59

everyone who thinks a cell phone company owes them something special is a not very bright.  It is a business relationship, not a friendship.  There is no reward for loyalty.  Do you get free loafs of bread at the grocery store, because you have been shopping there for 10 years?  No.  You get a phone for a discount, you agree to a contract.  It is nothing more indepth than that.

Posted by jayo on June 8, 2009 at 5:29 PM (PDT)

60

The one thing I haven’t seen discussed here, is WHY AT&T;would want to do something like this?  Could it possibly be because their network is already maxed out, and they simply don’t have the capacity to deal with millions of 3G customers switching over to 3GS?  Maybe they want to provide a disincentive to upgrade, because if everyone upgraded, their network would crap out.

Posted by Dopial on June 8, 2009 at 5:36 PM (PDT)

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