Question about purchasing iPhone 3GS for existing AT&T 3G users (1 Viewer)

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.

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.

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.

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!

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.

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.

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?

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.

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:

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.

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

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?

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

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

Okay, now I understand. Thanks gentlemen.

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.

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.