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Question about purchasing iPhone 3GS for existing AT&T 3G users

post #1 of 26
6/8/09 at 1:29pm
Thread Starter 
Okay, this purchasing thing happened rather fast and by the time it
was done I just spent $500 for the new iPhone 3GS and don't know why.

The phones are priced as follows:

$199
16GB

$299
32GB

Now I thought that as a 3G owner I was always eligible for an upgrade
at the new special price as listed above.

Reading the fine print...not so.


FINE PRINT: For non-qualified customers, including existing AT&T customers who want to upgrade from
another phone or replace an iPhone 3G, the price with a new two-year agreement is $499 (8GB), $599 (16GB), or $699 (32GB).

Okay, so I ordered a $32GB iPhone 3GS for $499

However, according to the FINE PRINT that should have cost me $699.

So how did I fall in the middle between not getting the entry offer
nor being charged what the FINE PRINT says I should be charged?

Something tells me I was pro-rated.

Interesting to hear from other users who bought the 3G last year and are trying to upgrade.
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post #2 of 26
6/8/09 at 2:24pm

Re: Question about purchasing iPhone 3GS for existing AT&T 3G users

Ron, according to this article on Engadget, you got the "mid-contract" price, which makes sense given you're about a year into your 2-year contract on the 3G.
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post #3 of 26
6/8/09 at 2:25pm
Thread Starter 

Re: Question about purchasing iPhone 3GS for existing AT&T 3G users

Got my answer...

The $699 is actually for no-commitment.
The $499 price is for early upgrade.

The reason original iPhone customers were eligible for
the $199/$299 iPhone 3G pricing last year is because the
original iPhone was unsubsidized.
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post #4 of 26
6/8/09 at 2:44pm

Re: Question about purchasing iPhone 3GS for existing AT&T 3G users

Ah, so that should mean that anyone who bought (and still has) the original unsubsidized iPhone is now eligible for the $199/$299 pricing on the 3GS, no matter when they bought their phone.
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post #5 of 26
6/8/09 at 2:46pm
Thread Starter 

Re: Question about purchasing iPhone 3GS for existing AT&T 3G users

Quote:
Ah, so that should mean that anyone who bought (and still has) the original unsubsidized iPhone is now eligible for the $199/$299 pricing on the 3GS, no matter when they bought their phone.

Yes!
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post #6 of 26
6/8/09 at 4:55pm

Re: Question about purchasing iPhone 3GS for existing AT&T 3G users

For anyone paying the $200 penalty to upgrade, you could always unlock your deactivated 3G and resell it on eBay. They are still selling for $400 and higher, although I expect there to be downward pressure on prices if a flood of deactivated 3G's hits the market.
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post #7 of 26
6/8/09 at 4:58pm
Thread Starter 

Re: Question about purchasing iPhone 3GS for existing AT&T 3G users

Michael,

In doing so, do I just remove the SIM card?

I am thinking of selling mine for $300 if my brother doesn't take it.
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post #8 of 26
6/8/09 at 5:48pm

Re: Question about purchasing iPhone 3GS for existing AT&T 3G users

Apple and AT&T Royally Screw Loyal iPhone 3G Customers | Cult of Mac
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post #9 of 26
6/8/09 at 9:18pm

Re: Question about purchasing iPhone 3GS for existing AT&T 3G users

Quote:
Originally Posted by Ronald Epstein
Michael,

In doing so, do I just remove the SIM card?

I am thinking of selling mine for $300 if my brother doesn't take it.

Ron, just decide whether you want to jailbreak the phone yourself or let the buyer worry about it. If you do it yourself, you'll have less of a headache while the SIM card is still installed.
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post #10 of 26
6/9/09 at 5:21am

Re: Question about purchasing iPhone 3GS for existing AT&T 3G users

Do you pay the high price if you're ending a two-year contract and starting a new one?

The iPhone 3G owners who are one year into a two year contract have to pay through the nose to get the 3GS today. But if they wait until next year, when their contract is up for renewal, would they get the $199?
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post #11 of 26
6/9/09 at 5:29am
Thread Starter 

Re: Question about purchasing iPhone 3GS for existing AT&T 3G users

Dave,

Yes. Not only are people like myself (who bought the 3G last year)
paying a $200 penalty on the phone, but we are entering into a new
2-year contract with AT&T.

It is also my understanding that if people like myself were to wait
a few more months (I think December) we may be eligible then for
the special pricing. In other words, I think every 18 months users
can upgrade their phone for the special pricing.

This is how I understand it at the moment.

So, anybody buying the new iPhone on June 17th may run into the
same problem as this year's 3G owners if a newer phone is released
a year from now.
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post #12 of 26
6/9/09 at 5:39am

Re: Question about purchasing iPhone 3GS for existing AT&T 3G users

So that makes sense, right? I'm a bit confused by the brouhaha. All carriers subsidize their phone cost through a two-year contract. If you want to upgrade early, you pay more.

And the big change with AT&T and Apple last year with the 3G was that Apple now sells the phones to AT&T at full price, with no subsidies. In return, Apple no longer gets a cut of the recurring monthly service fees.

So AT&T has no incentive doubly-subsidize phones. And to Apple, the iPhone is an iPod is an iMac: Apple doesn't give reduced pricing if a person bought the previous model just a year ago. This now works like any other phone contract with any of the major carriers?

Here's a summary of things:
Quote:
However, when Apple announced the iPhone 3G, it gave up its cut of subscriber fees in exchange for AT&T subsidizing some of the cost of the phone. So, while customers could pick up a brand new iPhone 3G for $199 or $299, the full retail cost of the phone--paid by those who, for example, didn't want to sign a two-year contract--was higher: $599 and $699.
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post #13 of 26
6/9/09 at 5:46am
Thread Starter 

Re: Question about purchasing iPhone 3GS for existing AT&T 3G users

That about wraps it all up, Dave.

Thing is, current 3G owners had to read through all the fine
print to find that out. You didn't think that it would be explained
at WWDC, would you? No sense getting an audience to BOO.
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post #14 of 26
6/9/09 at 6:24am

Re: Question about purchasing iPhone 3GS for existing AT&T 3G users

Quote:
Originally Posted by Ronald Epstein
Thing is, current 3G owners had to read through all the fine
print to find that out. You didn't think that it would be explained
at WWDC, would you? No sense getting an audience to BOO.
Can't argue with that. Bad form to get hopes up and then dash them.

On the plus side, so much of the new features come from the 3.0 upgrade per se, that many 3G owners will be fine waiting a year to get the new hotness. And early upgraders know the pain and expense of their habit
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post #15 of 26
6/9/09 at 6:31am
Thread Starter 

Re: Question about purchasing iPhone 3GS for existing AT&T 3G users

Dave,

One of the problems I find is that its hard to separate what is new
to the iPhone 3GS and what will be included on the iPhone 3G with
the 3.0 upgrade.

For example...

We know that the camera is new. So is the ability to edit videos?

However, how about voice dialing? Is that a 3.0 feature or 3GS feature?

How about voice iTunes control?

How about compass?
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post #16 of 26
6/9/09 at 6:53am

Re: Question about purchasing iPhone 3GS for existing AT&T 3G users

i think everything listed under the main picture is phone only

Apple - iPhone - Mobile phone, iPod, and Internet device.

which is the faster speed, the focus camera/video, voice, compass

edt: ugh lost all i just typed
http://www.apple.com/iphone/softwareupdate/

txting is 3.0, along with landscape keyboard, cut paste, bluetooth enhancements like headphones and game networking, parental controls and a new thing i just read, shake to shuffle, that willbe nice in coverflow mode, full search thru everything and the ability to buy movies/tvshows thru itunes
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post #17 of 26
6/9/09 at 6:57am

Re: Question about purchasing iPhone 3GS for existing AT&T 3G users

Ron,
Voice control, Compass, and Videos, according to MacWorld, were announced as part of the 3GS phone presentation, not with the 3.0 software. The implication is these are new phone features, not software upgrades.
Live Update: WWDC 2009 Keynote | Mac | Macworld
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post #18 of 26
6/9/09 at 7:02am
Thread Starter 

Re: Question about purchasing iPhone 3GS for existing AT&T 3G users

Okay, now I understand. Thanks gentlemen.
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post #19 of 26
6/9/09 at 9:10am

Re: Question about purchasing iPhone 3GS for existing AT&T 3G users

I would disagree that AT&T has no incentive to double subsidize phones...it locks subscribers into their service for another year. My employer has over 200 iPhone users and in the past year, when a user has lost or damaged a phone beyond repair, those users have had two choices...pay the full, unsubsidized price for a replacement phone and continue with his or her contract or pay the subsidized price again by renewing the two year contract from the date of the the phone's loss. So apparently they are now engaged in double standards with the 3GS.
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post #20 of 26
6/9/09 at 10:09am

Re: Question about purchasing iPhone 3GS for existing AT&T 3G users

Presumably AT&T has calculated their subsidization rate such that over two years of monthly fees, they make up for the hardware cost.

Broken and lost phones are presumably an exception, and empirically known to have some rate of occurrence, and the cost of that is rolled into the monthly rate for all customers.

Providing the full subsidy on a new iPhone at one year into a contract is different. You'd expect the rate of upgrades to be close to 100% of customers, far exceeding the rates for broken phones. Presumably with a new phone per year, this would also be an annual concern. So they'd have a two-subsidy payback plan and one-year subsidy payout. It would completely break the model and AT&T would lose money.

If people demand annual upgrades at subsidized rates, AT&T will provide it with higher phone costs and/or higher monthly fees for the annual contract.
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post #21 of 26
6/9/09 at 10:46am

Re: Question about purchasing iPhone 3GS for existing AT&T 3G users

DaveF has it right. AT&T can't afford to subsidize a new phone once a year when the subsidy is amortized over a 2-year period. If they did, eventually there'd be no hope of recovering the subsidy as their customers get in to deeper and deeper debt getting a new phone once a year. There's a reason that early termination fees are so high.

Let's say the subsidy is $200. That works out to $100 a year on a 2-year contract. If you want a new phone after 1 year, you've now been subsidized $400, and paid back $100 through the contract, so you still "owe" $300which you'll pay back through the contract over a 3-year period. Do it again after another year, you're now on the hook for $400. Again the next year? $500. Sooner or later the length of the contract will become overly long and the contract termination fee will be ridiculously high. AT&T will have difficulty recovering the subsidy if they allow their customers to get into debt over a glorified cellphone.
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post #22 of 26
6/9/09 at 3:05pm

Re: Question about purchasing iPhone 3GS for existing AT&T 3G users

"amortize"
I knew I was missing the right word
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post #23 of 26
6/9/09 at 5:39pm

Re: Question about purchasing iPhone 3GS for existing AT&T 3G users

Quote:
Originally Posted by nolesrule
DaveF has it right. AT&T can't afford to subsidize a new phone once a year when the subsidy is amortized over a 2-year period. If they did, eventually there'd be no hope of recovering the subsidy as their customers get in to deeper and deeper debt getting a new phone once a year. There's a reason that early termination fees are so high.

Let's say the subsidy is $200. That works out to $100 a year on a 2-year contract. If you want a new phone after 1 year, you've now been subsidized $400, and paid back $100 through the contract, so you still "owe" $300which you'll pay back through the contract over a 3-year period. Do it again after another year, you're now on the hook for $400. Again the next year? $500. Sooner or later the length of the contract will become overly long and the contract termination fee will be ridiculously high. AT&T will have difficulty recovering the subsidy if they allow their customers to get into debt over a glorified cellphone.


omg my head popped.

Quote:
Originally Posted by Michael_K_Sr
I would disagree that AT&T has no incentive to double subsidize phones...it locks subscribers into their service for another year. My employer has over 200 iPhone users and in the past year, when a user has lost or damaged a phone beyond repair, those users have had two choices...pay the full, unsubsidized price for a replacement phone and continue with his or her contract or pay the subsidized price again by renewing the two year contract from the date of the the phone's loss. So apparently they are now engaged in double standards with the 3GS.

last year when my 2g stopped working we went over to Best Buy
and bought the 3g and it started a new 2 years, then 3 weeks later
when that iphone stopped working i exchanged it for a new one and started
another 2 years.
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post #24 of 26
6/9/09 at 5:43pm

Re: Question about purchasing iPhone 3GS for existing AT&T 3G users

I'm still trying to figure out how my wife and I will get 3gs without paying the crazy price.

she has a moto that is now ready to be upgraded, I have the 3g that I got
at launch last year.

She can get the iphone on her phone number for the $199 or $299.
What we want to do is get the iphone on her line but switch the phone numbers.

any ideas?
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post #25 of 26
6/9/09 at 5:55pm

Re: Question about purchasing iPhone 3GS for existing AT&T 3G users

Quote:
Originally Posted by TonyD
I'm still trying to figure out how my wife and I will get 3gs without paying the crazy price.

she has a moto that is now ready to be upgraded, I have the 3g that I got
at launch last year.

She can get the iphone on her phone number for the $199 or $299.
What we want to do is get the iphone on her line but switch the phone numbers.

any ideas?

As I mentioned yesterday, just buy the 3GS as your wife's upgrade, swap the SIM cards, keep the 3GS for yourself and hand over the used 3G to your wife. Problem solved.
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post #26 of 26
6/9/09 at 5:58pm

Re: Question about purchasing iPhone 3GS for existing AT&T 3G users

I saw that, I guess it didnt compute.

All I need to do is swap the sim cards then, seems too easy.
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