iPhone Users Angry Over AT&T Upgrade Policy

All is not sweetness and light in the wake of the Apple WWDC kickoff announcements, especially concerning the evolution of the iPhone. Reader Hugh Pickens writes: "AT&T will offer the new iPhone 3G S when it debuts later this month at a cost of $199 and $299 for the 16GB and 32GB models, but only to new customers and those who qualify for the discounted price. AT&T subscribers with an iPhone 3G who are not eligible for an upgrade — those not near the end of their two-year contracts — will have to pay $200 more — $399 for the 16GB model and $499 for the 32GB model. 'This is ridiculous and slap in the face to long-time loyal iPhone customers like me who switched from T-Mobile and the only reason was the iPhone,' writes one unhappy iPhone customer. 'We have to mount a vigorous campaign to change this policy. Call your local AT&T and ask for the manager and complain. Send e-mails and post in forums everywhere.' The issue is spurring heavy debate on support discussion forums, with some customers supporting AT&T. 'The option you have is to honor the contract you freely committed yourself to,' says one forum member. 'If you want to upgrade early then you will have to pay full price with no subsidy discount. You can't blame anyone but yourself for your predicament.'"

Comments

BooHoo

[Anonymous Coward]

You know Apple releases a new phone every year, and you know AT&T makes you sign a 2-year contract. Either pay the higher price for the upgrade or live through the horror of not having the latest shiny product until your contract runs out.

Re:BooHoo

[puck01]

I have to agree. I'm not a cell phone guru by any measure, but only offering the discount rate every two years seems to be a fairly standard term in my experience.

Re:BooHoo

[Skye16]

Or you could boycott the particularly onerous terms of your contract by paying your ETF and not giving AT&T your money any longer. You and I both know it doesn't cost them even remotely close to 95$ a month for your service - their profit margins are obscene. It's absolutely their right to request you pay that amount each month, and if you were suckered into a contract, that's a blow to you. Learn by your mistake by terminating the contract in the legal manner (and if that means waiting until they change the terms of the contract, so be it) and don't fucking enter another one like it again. Until you tell them you're not interesting in paying obscene costs or entering into their service with any contract (even forgoing your precious ball and chain for a while), they'll keep bending you over and blasting your asshole repeatedly. If you want to just lay there and take it, that's your prerogative, but kindly have the decency to shut the fuck up about how you're not receiving a perceived fair bargain from the entity you willfully signed your custom away to.

Re:BooHoo

[ScrewMaster]

You know Apple releases a new phone every year, and you know AT&T makes you sign a 2-year contract. Either pay the higher price for the upgrade or live through the horror of not having the latest shiny product until your contract runs out.

Absolutely. Besides, early adopters always get the shaft. That's the price you pay for being an early adopter.

Me, I bought a G1 a few months ago, and the G2 is coming out this month, I understand. I'll have to wait to see if I do, in fact, end up feeling screwed. If so ... I screwed myself and I did it willingly because I didn't want to wait.

Bunch of crybabies.

Re:BooHoo

[icebike]

All well and good to posture, but those having an iPhone under the only contract terms available have sunk costs and can't do a thing to recover them.

The phone is locked to ATT.

ATT subsidized the iPhone heavily and wants to recover their costs. Its understandable.

Yes, ATT should allow you to pay off your ETF (which by the way should ONLY include what they owe Apple for the phone) and let you start a new contract with a new phone.

What could be more fair?

Re:BooHoo

[roc97007]

This is genius.

1) Apple culture heavily weighted towards having latest shiny object

2) AT&T contract requires 2 year ownership or pay $200 penalty

3) Apple maintains 1 year design cycle

4) Profit!!

Re:BooHoo

[rirugrat]

...and don't fucking enter another one like it again.

I didn't know Ballmer owned an iPhone.

Re:BooHoo

[MrCrassic]

Exactly. I guess with a phone this popular, inane complaints will always rise to the surface.

This is the case with every mobile provider, at least here in the United States. You sign a contract, get a subsidized phone, and in a few years, provided that the phone qualifies, a customer can apply for a discounted upgrade. It's worked nicely for T-Mobile, Sprint and VZW customers since it's conception.

HTFU.

Re:BooHoo

[gumbi west]

AT&T has a profit margin of 10%. If you think that is insanely high... I'd rather not be in business with you.

Re:BooHoo

[MrCrassic]

You know what's somewhat ironic about all of this? At this point, the iPhone is probably the easiest phone to unlock EVAR, and is also the poster child for phones chained to tailored calling plans.

Education goes a long way...

Re:BooHoo

[malchus842]

But it's not being screwed. You and I willingly bought G1 phones, and have used them. Nobody forced us to buy them, nor enter into the contract. So when the G2 hits, if I really want it that bad, I'll pay the price. If not, I can wait out the 2 years and get the discount(*).

(*)I have 5 lines on the family plan, so in the end, I can pretty much upgrade any time I like. My kids love getting the hand-me-down cool phones, and my wife isn't into technology. :-)

Re:BooHoo

[cencithomas]

AT&T has a profit margin of 10%. If you think that is insanely high... I'd rather not be in business with you.

[citation needed]

Re:BooHoo

[ScrewMaster]

But it's not being screwed.

Yes, I agree. That was precisely my point. I meant screwed as in "aw, damn, this new model is like, way cooler than my old piece of junk". I didn't mean to imply that the vendor or cell phone company were in any way to blame for my impatience.

Re:BooHoo

[Forge]

A mere price doubling? These people should consider themselves fortunate.

I remember nearly a decade ago when our then only phone company sold it's top end cellular to staff at a 30% discount with a 2 year interest free payment plan. They thought it was really a great deal, ontil 18 months later when a new phone matching or exceeding all features of that model started selling for less than the monthly installments.

As for myself, I have never bought a cellphone costing more than 2X the absolute cheapest phone on the local market. But, that's just because I am not rich.

Here is a more general rule of thumb: If your phone is crushed by a car 15 minutes after your last backup and those backups are safe, you should only be upset over the inconvenience of being out of touch for a few hours and having to restore on the new phone. If the loss of the phone instrument itself is a cause for concern, you payed too much.

Re:BooHoo

[the_humeister]

What exactly do you consider "obscene" profit margins? If you look at AT&T's income statement, their profit margin is on the order of 10%. That's not anywhere close to "obscene." For comparison, Microsoft's margins are closer to 30%.

Re:BooHoo

[drsquare]

Right here:
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Re:BooHoo

[cgenman]

According to AT&T's announcement from 2008, their current early termination fee is 175 dollars minus 5 dollars per month that the contract was completed. For half-way through a 2-year contract, that's 115 dollars.

So if you are thinking of paying the extra money and upgrading your phone, first pay the 115 bucks and cancel your account. Then apply for a new account with the no-contract discount. Instead of paying 399 for the phone, you'll only pay 314, or a savings of 85 dollars.

Re:BooHoo

[Anonymous Coward]

As for myself, I have never bought a cellphone costing more than 2X the absolute cheapest phone on the local market. But, that's just because I am not rich.

So 2x $0 = 0? (since you can always find a contract w/ a free phone) Why not just say $0?

Re:BooHoo

[Brian Gordon]

You use a wikipedia reference when wikipedia would answer you? Just go to the AT&T article and look at the little numbers on the right. Looks like $119 billion in revenue and $10 billion in net income so it's so about 1/12 it's in the ballpark.

Sometimes I wonder how you spend $100 billion in one year. Where can you go and say "I have $100 billion to spend"? Delay upgrading your corporate phones one 6-month cycle, that's what an odd billion? That will feed me for 500,000 years. Fire all the sites' maintenance guys who work on the southwest middle lawn. Get the other guys at each site to cover for him. In return, 500,000 years of the warm fuzzy feeling commoners get knowing that while they starve their taxes are making their adored queen comfortable and happy.

Re:BooHoo

[vipz]

Same here. In fact, I "pre-screwed" myself by consciously buying the G1 without a contract, paying $380 for the privilege to remain out of a contract.

Re:BooHoo

[Brian Gordon]

Probably because Microsoft's developed expensive products but after that they just have to pay people to stick CDs in boxes and direct the incoming dump trucks full of gold coins. I'm not surprised to see such a high margin if they're in the "sit on our successful product and let it sell for awhile" phase of its operations.

I bet any sales of product based business model will generally have a higher margin than continuous providing a servic

Re:BooHoo

[SyncNine]

Exactly -- I worked this out with my fiancee. She was about to buy a new iPhone anyways so we signed her up for a new plan and I paid for the phone. She gets my 16GB iPhone 3G when the new one comes in and I get the shiny new 32GB iPhone 3G S and only paid $299 for it.

On a side note, all you clowns complaining about $499 for an upgrade price, for some reason my account didn't even qualify for that upgrade -- they wanted $699 from me, claiming I wasn't eligible for upgrade pricing until Dec 2009. $322 and change later and I've got a shiny new iPhone 3G S. It's not impossible. One of my co-workers got AT&T to provide him the $299 upgrade pricing just by calling, complaining, and threatening to cancel and pay the ETF. They sent him over to 'customer retention', who asked why he was cancelling and when he told them they offered him the upgrade at the $299 price...

Of course, he started at $499 -- not $699. I figured since my account was already screwed for some reason, I'd leave it be. Plus, if in December they reset my contract entirely for some reason (as the site shows it will), I'll have a free upgrade just in time for the next upgrade next year :P.

Re:BooHoo

[Brian Gordon]

You can keep your number.

Re:BooHoo

[Jophiel04]

You can carry your phone number over from carrier to carrier, but if you cancel your contract you no longer have a claim to that number unless another carrier requests to take over the number from AT&T, which since they were your provider before and after, won't happen.

Sometihng else to consider is that AT&T has no obligation to sell you the second contract, nor can you be certain they don't do some sort of blacklisting of people who cancel their contracts. Seems like a lot of hassle and risk for saving $85.

Re:BooHoo

[Brian Gordon]

I don't even want to touch Kindle until I see "Kindle Final - We Will Never Upgrade This Product Again". Every time there's a new kindle I'm like whew I barely didn't buy the last one and now there's a thousand must-have features yay but WAIT WHAT ABOUT THE NEXT ONE.

Similarly, I'm never upgrading from my 4 year old laptop, ever. If I spend the money then 2 months later people will be floating past my window on flying scooters with 8-socket quad core xeons on their wrists. I'm terrified of the day I realize I'm counting memory in gigs the same way I count in megs (64 128 256 512 1024 range).

Re:BooHoo

[bertoelcon]

I bet any sales of product based business model will generally have a higher margin than continuous providing a servic

And thats why the Media Industries won't change with the times.

Re:BooHoo

[Korin43]

Pretty much any phone these days comes with Bluetooth, and if you have Bluetooth, you can use Bitpim.

Re:BooHoo

[mysidia]

They could have a 10000% profit margin in their text messaging and cellular plans business.

While having massive losses or only modest profit in other businesses. It just depends on how much of their business is cellular.

A lot of the business ATT has in phone companies it acquired is not cellular. Think plain old telephone service.

Long distance, and other carrier services...

Recall that in the areas where they are ILEC, they have build-out requirements imposed on them.... highly massive infrastructure costs to deploy certain telco services to all residences..

And "tarrifed" services, which are price-regulated, so they can't charge person A and person B in the same community different prices for their basic phone line (just because it's 100x as expensive to reach person B due to geography, doesn't mean they can charge person B $200/month instead of the normal $15/month, in order to recover costs).

Yes, it can be expensive to deploy hundreds of antennas in a county to provide wireless connectivity. I won't say mobile services are dirt cheap.

But compared to the costs of providing land line service to millions of homes, it could be just plain tiny......

And i'm sure ATT has other businesses.

Re:BooHoo

[Dragonslicer]

Right here:
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The "Reply to This" button?

Re:BooHoo

[mysidia]

Maybe you signup for service with a 'temporary' carrier first, get just their free low-end phone, or preferably get an arrangement without a contract, or you rely on the fact you can cancel a new contract before 30 days without penalty if you return the phone.....

Then you transfer the number from ATT to the temp carrier, while cancelling your ATT contract. Then a few weeks later, after that's a done deal, you go buy the new ATT contract and request to get the number transferred back to ATT

You cancel service with the temp carrier before the 30 day "trial" limit.

Re:BooHoo

[natemc]

You do have to wait 90 days to open a new account with them. I had an overzealous AT&T manager cancel my phone service after my 3rd Sony Ericsson broke in less than a week. I went to another store to open an account to only be told the above. So just be warned that you will be without for 3 months, at least.

Re:BooHoo

[mysidia]

Based on the normal timeframe of the wireless industry: the porting process for a wireless-to-wireless transfer should be completed within 2 and a half hours from the time the porting request is made of the old carrier by the new carrier.

See here.

If a carrier imposes an unreasonable (ridiculously long) timeframe such as 30, 60, or 90 days, they may incur the wrath of the FCC, e.g. regulatory action may result.

Re:BooHoo

[Ziwcam]

Greetings from a EU citizen. You guys need to lobby for number portability. It's a big step towards more competition when customers can switch to another provider without worrying about losing their phone number.

We have number portability. What these folks above me are talking about is switching to the same provider and keeping your phone number. It might be possible in theory, but obviously the company is on to those tricks, and so the systems aren't set up to allow you to port a number from a current AT&T account to a new AT&T account and get the "new account" equipment discount.

Re:BooHoo

[JustNilt]

Full disclosure: my soon-to-be-ex wife works at AT&T and often got calls like this when she did billing support.

The variables involved in whether you get an early upgrade are weighted in how much you cost the company. If you're always calling for support or whining and demanding credits here and there you're likely to be told to pound sand on any early upgrade. The agents have a screen that tells them whether you are a profitable customer worth locking in or not.

Re:BooHoo

[triceice]

I agree with you. I have been a smart phone user for over 10 years and I knew that after using my wife's iPhone that I wanted one. I also knew that means I would have to get back under contract. I had been an Cingular user without a contract for over 7 years (coverage in my area was better from them then from the others). I only bought unlocked phones and paid the full price for them. I know that I am under a 2 year and went in to it with eye wide open. AND SO DID EVERYBODY ELSE. Simply put it's your money and no one forced you to sign the contract.

Re:BooHoo

[MikeBabcock]

What kills me is that people still get into these plans willingly. Its been years since most of them started doing the cell phone game, and they should know better by now. I looked at the three year plan one cell company wanted me to enter into years ago and decided to buy the phone for full price instead.

Of course, our short attention spans allow us to both sign a two year contract and expect a new phone the next year on that same plan, and be confused why we have to pay more when the phone is worth what they're charging for it.

Its not like they're selling you a $200 iPhone for $400. They're selling you a $400 iPhone for $400, with a discount for signing a NEW contract. Jeez.

Re:BooHoo

[MikeBabcock]

I'm waiting for "Books sold on this product will never again need to be checked for authenticity and can be ported to any future Kindle device you purchase, and if we ever go under or cancel this offer, we will give you the book in PDF format for free."

That is to say, I'm probably never buying one.

Re:BooHoo

[debatem1]

I just switched, and my number was available instantly, although they wanted about 900 forms of identification before they would go through with it.
In retrospect, telling my friends and family my new number was probably a better choice than handing everybody else my SSN, but hey, them's the breaks.

Re:BooHoo

[tyrione]

Apple has $30 Billion plus cash on hand. Microsoft even more. I guess they love to pay taxes, by your logic? AT&T is heavily investing into their infrastructure as the market continues to demand more.

Re:BooHoo

[NovaHorizon]

only if you port out to another carrier, or wait for the number to re-enter the pool. Otherwise I don't think they have access to the tools needed to regrab that number.

Re:BooHoo

[The_mad_linguist]

I would think it would be harder to code a lock for the phone, and then break through the security.

Re:BooHoo

[anagama]

I looked at the three year plan one cell company wanted me to enter into years ago and decided to buy the phone for full price instead.

Of course, our short attention spans allow us to both sign a two year contract and expect a new phone the next year on that same plan ...

I bought my phone 7 years ago this month. Paid $180, did have to replace the keypad at some point with one from a different phone of the same model I bought off Ebay for $3. The thing still works great, but sadly, Qwest is going out of the cell business completely on Oct. 31. I was proud to have the oldest phone of anyone I know, but I got there without really thinking. I've never been all that excited about cell phones and once I made I plunge, I stopped thinking about it altogether. Maybe that is another kind of short attention span.

Anyway, I've been testing out a drug dealer phone from boost mobile. Doesn't do anything fancy but the speakerphone sounds great, way better than my wife's iphone in both input and output. The phone is only $60, and for $50/month (no contract period) I get unlimited talk and text. If something really cool comes out, like an iPhone Nano or an iPhone shaped to fit one's palm(*), I can go for it without any contractual issues.

(*) Thin looks cool, but the iPhone's dimensions are not ergonomic as a phone. I have plenty of Apple hardware and love their notebooks for the sleek melding of form and function. With the iPhone however, function and design are poorly integrated by the fact that non-phone priorities overwhelmed the primary purpose of the device.

Re:BooHoo

[Forge]

My fault for not Clarifying.

I live in Jamaica. Our telecoms regulations are somewhat different and our phone companies are a lot different. (especially the dominant cellular provider).

The most popular phone plan (Something like 93% of the market) is "prepaid". Meaning. You can buy a phone and spend less than U$10 per year on call credit if all you do is receive calls. (They require at least one top-up every quarter)

With that kind of structure, the phone companies take a gamble every time they subsidize the cost of an instrument. For this reason, mid range phones are sold at near cost and High end phones are sold at a profit.

Note the prices. The Exchange rate is roughly JM $90 to US $1. So that Bottom of the line Nokia 1200 is selling for under $13 with no contract or obligation. A true disposable phone. While the BlackBerry Storm is $777.

Re:BooHoo

[coolsnowmen]

I'm sure it might be possible to game the system, but the amount of time you lose on the phone with multiple levels of customer service if anything goes wrong (and it will) will make it not really worth it.

Re:BooHoo

[roc97007]

Don' look at me, I have no intention of owning one of those things any time soon. With phones, I tend to choose carefully, buy once, and then keep it until it can't be fixed anymore. Previous phone a Palm 680, and frankly it was somewhat of a relief when it finally quit. Current phone a Blackberry Bold, and I plan to keep it for a good long time.

Frankly, I observe without understanding this compulsion to have every new thing. If your phone was good enough a year ago, isn't it still? If it wasn't, whyinhell didn't you buy something that was?

Mind you, if the iPhone had had mms and cut-n-paste and stereo bluetooth and a decent camera with video and flash (which it still doesn't) a year ago, I might have gotten it instead of the Bold, which does have these things. But it didn't, so I didn't. And even then, the lack of a micro-sd slot may have been a deal-breaker.

But all this is moot. I got the phone I wanted. I like my phone. I plan to keep it. I have to question how much you could like your phone if you want to dump it at the first opportunity. And for such paltry improvements.

Re:BooHoo

[imapopsensation]

What is it about a some iPhone users that makes them think that the general rule of lending and new product pricing doesn't apply to them? When a new product comes out, its costs more. Borrowing at interest or signing payment contracts sometimes offsets that new product price so you an get that new product smell. Getting it at new user price requires a two year contract, and a new customer opp for ATNT. When a new car comes out, you can get 5000 back for signing a 60 month lease to 8% interest. It happens with every manufacturer and every new product, period. Instead of wasting time iWhining about it, why not look at the monarchy subscribed to when you buy a closed phone, from a single service provider, with a limited (selective) development platform, with a single outlet for purchasing things? Shouldn't this be more concern then most shiny thing in the room?

Re:BooHoo

[CubicleView]

I agree, you know you've spent too much on the phone if you're more concerned about the car having crushed your phone than anything else in the proximity to your pocket... That being said, shiny things do not last forever, they wear out and or become obsolete quite quickly. Generally speaking you get better value for money with last generation technology, ie stuff that was new last year. But if you want new stuff as it becomes available then you pay the premium. This has always been the case and is not news imo.

Whoa! ATT sucks balls?

[Reality Master 201]

This is totally out of left field. It's a good thing the US is chock-a-block with better wireless carriers and the iPhone is portable between them.

never should have given the retro price cut

[Lehk228]

So the issue is that a new model has been released and only people who are eligible for a new phone can get it at a discount? Apple never should have caved on the iphone price change retroactivity, now they can't improve anything without the existing users demanding free upgrades for life.

Re:never should have given the retro price cut

[nine-times]

Yeah, I don't really get the complaint here. I've complained before when cell phone carriers wouldn't give me the same deal as "new customers" even after I've completed my contract-- not so much because I think that they're obligated to offer me those deals, but more because I think it's stupid and it's caused me to switch from a carrier I was otherwise happy with in order to get a better "free" phone.

However, the $199/$299 prices for the iPhones are their subsidized prices. The real prices are $200 more, but you're essentially getting $200 cash-back for locking yourself into a t 2 year deal. If you're already in your 2 year deal, then you're not in a position to sign on for another 2 years.

Re:never should have given the retro price cut

[ScrewMaster]

I don't understand why a current owner would be angry. I can save $200 now. Why not just feel happy for me instead?

Mainly because iPhone owners have been known to eat their young.

Re:never should have given the retro price cut

[MillionthMonkey]

iPhone owners have been known to eat their young.

There's an app for that!

Or..

[Wovel]

How every other carrier and every other phone works. Just because they were generous when the 3G came out, does not obligate them to do so again.

Re:Or..

[SwabTheDeck]

Just because they were generous when the 3G came out, does not obligate them to do so again.

It wasn't really that they were "generous" about the 3G. It was more that the original iPhone wasn't subsidized at all. Basically, they were giving a subsidy to people who had never really received one previously. Either way, this complaint is stupid. Every other US carrier and phone manufacturer has these exact same terms. Can someone explain to me why it is that when it's Apple + AT&T, it becomes an unbearable outrage?

iPhone Users?

[sthomas]

Looks like only one user was upset in that forum. The rest all saw the logic and understood what a subsidy is used for.

Re:iPhone Users?

[Anonymous Coward]

Really, I just bought an iPhone in February, and will be amazed if I can get a discount beginning February 2010 or even August 2010, and I understand completely. I could sell my phone right now for $400 easy, so it wouldn't make any sense for AT&T to sell me the better version of my phone for $200.

Stuff like this makes Slashdot look silly too, a massive jump to conclusions over a small minority shouldn't be news.

Re:iPhone Users?

[icebike]

No, you can't sell your iPhone right now for $400.

Sorry, take a look at the current prices for locked iPhones on Ebay. Falling like rocks.

Re:iPhone Users?

[Ziwcam]

Protip: Dial *NEW# then hit send. It will tell you when you'll be eligible again.

Really?

[Anonymous Coward]

'We have to mount a vigorous campaign to change this policy.'

A vigorous campaign? Really? I'm sorry, but in this context, the author simply sounds pathetic.

Re:Really?

[Wovel]

It does seem a tad late to mount a vigorous campaign against the entire US Cell Phone Industry.... What are we wll going to do, switch to Boost?

Re:Really?

[sthomas]

"vigorous" made me laugh. For once I'd like to see someone launch a lackadaisical campaign. In fact, this is a call to arms - let's launch a lethargic campaign to create a new era of de-energized campaigns!

I am incredibly upset about this.

[Anonymous Coward]

Things I'm also upset about:

No more free lunches.
Gas costing more than $0.05 a gallon.
Having to walk more than three feet from my car to my local superstore.
The fact that I wasn't born in a time where peace was on earth, everything is free, and we're all immortal.

I'm so angry that I'm punching a wall and hoping someone will pay for its repair as we speak.

Slap in the face? WTF?

[oodaloop]

AT&T and Apple are trying to get new customers by lowering the initial cost and subsidizing the remainder on a 2 yr plan. If you already have an iPhone, you don't qualify, plain and simple. Why is this a slap in the face? When did we as a society get our collective sense of entitlement?

Re:Slap in the face? WTF?

[ScrewMaster]

When did we as a society get our collective sense of entitlement?

It started sometime back in the mid-sixties, and it's been all downhill ever since.

Re:Slap in the face? WTF?

[Bloopie]

How does one user complaining about upgrade policies on a forum, with almost all the other users thinking the policies aren't so bad, qualify as a "collective sense of entitlement"?

This is nothing new.

[JimXugle]

If you had an Original Motorola RAZR and you wanted a new one, you had to pay full price.

I fail to see the issue here.

Re:READ THE ARTICLE, FOOL!

[jchawk]

They are absolutely not doing this. I am an existing AT&T customer who has an iphone. I am no longer under a current contract as I have been waiting for the new iPhone. I just double checked before posting and I qualify for an upgrade to the new iPhone if at the discount pricing if I am willing to sign a 2 year agreement with AT&T.

Apple doesn't subsidize these phones the phone carriers do.

Nothing to see here but confused forum posters and bloggers move along please.

Holy Shit

[yerktoader]

The general consensus here on Slashdot so far:

1)"tsfroggy"(RTA) agreed to his/her terms in a contract and has to deal with the pricing like everyone else.

2)A past discount is not an obligation for a future discount.

3)"tsfroggy" is a whiner.

4)AT&T is clearly in the right on this, even if the pricing is too high.

I must say, Congrats gentlemen. I'll be interested in seeing how long this lasts in this particular thread.

Re:Holy Shit

[DamienNightbane]

4)AT&T is clearly in the right on this, even if the pricing is too high.

If people are paying for it, the price is in no way too high.

Re:Whoa! ATT sucks balls?

[ScrewMaster]

This is totally out of left field. It's a good thing the US is chock-a-block with better wireless carriers and the iPhone is portable between them.

Very funny, and for some reason it makes me want to throw up.

Bingo!

[King_TJ]

Honestly, given the current state of our economy, I'm surprised more people aren't ashamed to post such nonsense.... Even though we don't yet know exactly what will be in the latest revision of the iPhone, all indications point to a few relatively minor tweaks, like a built in compass and ability to use the faster tier of 3G cellular data network. Oh, and likely a faster graphics processor, which is nice -- but did anyone honestly have issues with it updating too slowly before? This will only matter for some games that want to push the envelope a little further with how much you can do on a phone. FAR from a necessity, especially for those of us who'd rather play "real" games on a home computer or console system anyway!

Heck, I bought one of the very early 1st. gen. iPhones, and I didn't WANT to go to the 3G model. The version using the slower EDGE network was about $10 cheaper per month to keep a contract on, and I thought it had a more "solid" feel to it than the plastic-backed, sloped wedge shape of the current model. But finally, when mine started acting up, outside the warranty period, it just made more sense to buy a new phone.

If you can get past the pointless "keeping up with the Jones'" attitude for a minute, I fail to see why a 3G iPhone owner would be that compelled to rush out and upgrade at all? Those that have that irrational need to "show off" by having one first? Well, let them pay full retail price!

Re:Bingo!

[thejynxed]

Here's why:

iPhone 3G-S

(Currently, the processor is assumed to be an ARM, but unknown version and clock speed, Apple makes vague claims about being twice as fast on average as the ARM 11 in the previous iPhone 3G)

Camera: 3.0 megapixel autofocus with macro mode and auto white balance. -- You mean I can finally take outdoor shots at the Audubon and have them look somewhat decent? AND be able to send them back to my PC remotely? AND not have to lug along my laptop? HELL YES.

Video: 30fps VGA with on-device editing capability -- Now you don't need to jailbreak your phone to record video. Hallelujah.

Voice Control: Dialing, music control --- I hope it actually works, and if it does? Sweeeeeeeeeet.

Nike+ Support: Yes - For you exercise nuts.

Networking: 7.2Mbps HSDPA, WiFi, Bluetooth 2.1 + EDR --- This alone makes it worth the upgrade, note that the 7.2Mbps is double what the old iPhone 3G has to offer. Essential for making tethering actually useful.

Oil/Water resistant finish: Yes - Less smudges? Finally.

Integrated Magnetic Compass: Yes --- Awesomesauce.

Headphones: Inline remote for music control --- Remote control my iPhone music playing? ABOUT DAMNED TIME.

Battery Life: Up to 5 hours talk time / data on 3G, 12 hours on 2G. Up to 9 hours data on WiFi. Up to 30 hours audio. Up to 10 hours video. -- Standard 3G talk time is the same as before. 2G, WiFi, audio and video are all extended a few hours each, with the largest allotment going to audio @ a 4 hour increase.

I hope this answers your question as to WHY people would want this over the old craptacular 3G iPhone.

Mis-set expectations

[fullfactorial]

2G cost $599 at launch because it did not require a contract.
3G cost $199 at launch because it required a contract.
3GS will cost $199 at launch because it requires a contract.

Existing iPhone 3G owners can't upgrade for free because they're still paying off their subsidized phone.

Apple didn't realize the bease they were creating when they asked AT&T to try a non-subsidized model for the initial launch. Now everyone remembers the "free" upgrade to the 3G, but somehow forgets paying $599 for a 2G on launch day.

Re:-1 Flamebait

[Wovel]

It is much more than a fancy phone or even a blackberry. You are not really comparing apples to apples. (sorry). Yes it is a gadget and no it is not necessary, but no phone is really necessary. Some people want to have one device they can use for phone, email, scheduling, music, games and whatever the other thousands of apps do.

Having said that, this whole thing is silly. Whole world is turning in to a bunch of entitlement addicts not willing to live up to their obligations.

And that is why I continue to wait....

[paulsnx2]

For some people, the IPhone as currently configured is just huge. They travel, or they do work that doesn't involve a computer....

Me, I am in front of a computer all day. Sure there are time when having access to email when out and about would be nice, but seriously, it isn't something that is killing me.

So I use a three or four year old phone. It can do messaging, and I can play a game or two, and use some Star Trek ring tones.

I will buy a Smart phone. But only when that 1) doesn't lock me into a single provider, and 2) all this kind of crap has settled out, and 3) when such a phone isn't locked into one vertical change of command (Apple).

I don't want to spend huge dollars on a phone only to have to spend huge dollars to get the next iteration. I will wait until the delta between iterations isn't so vast.

So one of these years I think smart phones will let me run applications I get from third parties. They will interface with my computers as well as with the Internet. And I will be able to reasonably make a phone call. And that phone will not break the bank.

Customers?

[aaandre]

The shareholders are the customers. Service subscribers (you) are the product. Your only power is to vote with your dollar, by the numbers.

Know your place, know your options.

Oh, and apple product update cycles are pretty predictable.

Re:Why not just add to your term

[MBGMorden]

Because you're essentially running up "debt" that way, that the phone company is going to take longer and longer to recoup. When they give you a discount on that phone, they're essentially loaning the money for a set time. Asking for a year's extension on that time costs them. Imagine if a customer did that every year as the new models came out. They extend their contract to 3 years now. Next year they're up to 4 if they switch out. Pretty soon they're racking up owed contract years that they'll either newer get to, or they're going to have to eventually wait out for an extremely long amount of time before they can get a new phone.

I mean honestly, if this guy is whining now about this model - do you honestly think he's going to get this one and then wait THREE years (an eternity on the cell phone market) before picking up the newest model? No, he's going to want the latest and greatest every time. If he wants that then fine, but he needs to cowboy up and pay the full price.

Not Crybabies.... Fanboys.

[PC and Sony Fanboy]

Bunch of crybabies.

No, its a bunch of rabid apple fanboys who want to piss away more money to apple, but can't stand the idea of paying AT&T a little extra cash for the contract they willingly accepted.

I'd be upset too, if I didn't know that apple released new products yearly with their masterplan of planned obsolescence.

Re:Not Crybabies.... Fanboys.

[ScrewMaster]

Bunch of crybabies. No, its a bunch of rabid apple fanboys who want to piss away more money to apple, but can't stand the idea of paying AT&T a little extra cash for the contract they willingly accepted. I'd be upset too, if I didn't know that apple released new products yearly with their masterplan of planned obsolescence.

No argument from me.

Re:Not Crybabies.... Fanboys.

[pwfffff]

Google for 'Android Cupcake' and then consider buying yourself a new phone.

For 500$

[Korbeau]

I'd rather have 2 very nice escorts, I'd least I'd get screwed right!

The Pre is looking better

[docbrody]

I don't have a problem with what AT&T is doing. I get their logic. But for me personally, this is one more reason that I might just go ahead and try out the Pre. (the other reason is because it works with iTunes). I will miss my Apps, but at least my iPhone will effectively be an iTouch.

I guess AT&T has figured this in. The only reason to give a discount to upgraders would be to lock them in for another 2 years. I guess they figured that enough people will pay full price or stick it out until the end of their contract that they don't need to provide an incentive - not now anyway. They might be right... im not even sure what i will do myself yet (have not looked into what ATT cancellation fees will be, how long Sprint will try to lock me in, etc).

Re:The Pre is looking better

[Ziwcam]

(the other reason is because it works with iTunes).

For now... There's no telling what Apple will do (intentionally or not) to break that functionality in the future.

usury.

[Anonymous Coward]

Actually, the terms were *always* onerous and unfair. It's just that there was never a phone available that really made people say "i want that" often enough to notice that they were getting shafted.

Now the iPhone is out and it's become the banner to rally behind.

Frankly, I think it's too much for the phone companies to be allowed to sell the phones. They've shown they can't play fair when they have that ball. Twice. Once with the regular phone market, and now with the cellular phone market.

They probably ought to be forbidden at this point from selling the phones at all. If people want to finance their phones that should be their own business.

Re:usury.

[MrCrassic]

I'm not arguing about fairness here. In fact, I think that the subsidies administered by cell phone providers are inflated a bit too high. I'm just stating that those who are complaining about this practice should have done a bit of their own homework, at the very least.

A common practice is a common practice.

Me too

[Locke2005]

I have a similar problem. I got married a few years ago, but now thr old lady is looking a little worse for wear, and there are much younger and hotter models avaailable now! But my lawyer tells me I have an implicit "contract", and that upgrading will cost me big bucks! WTF! This is so unfair! They should have warned mme in advance how expensive it would be to trade up! Or maybe they did, but I wwas so excited with my shiny new toy to notice... either way, I'm mad as hell and I' going to bitch and moan until I get my way!

Half subsidy

[cybereal]

Actually what is being offered is a compromise. The full retail value of the 32 GB model is $699 not $499. AT&T is offering those iPhone owners who purchased their 3G upgrade last year, under the terms of a 2 year subsidization contract, the opportunity for a special upgrade at half the subsidization cost. So, for example, when I bought my iPhone 3G last year on day 1, even though I promised to complete an entire two year contract to cover the major discount offered at the time, I will still be able to restart a new two year contract and be rewarded with a $200 discount.

So even though those with no further contract obligations (actually, in many cases you can upgrade at full discount after only 18 months of your 24 month contract) and those new purchasers will get a nice $400 discount, I think I'm getting a pretty honest deal with a half discount halfway through the obligation.

However, many people are clearly confused for various reasons. One cause is likely that many of these iPhone customers were never smartphone customers before. These people had no idea just how much money smartphones cost MSRP. The other part of it is original iPhone (Edge) buyers were not subsidized at all, and when the 3G came around, the offer was presented as though it was a special situation allowing for an early upgrade. Well that is partly factual, if you wanted to upgrade to any other phone you would not have been able to at only one year. I find this aspect to be particularly disgusting on AT&T's part, but it's all part of the contract... At any rate, since there was no subsidization in the original two year contracts for AT&T to cover, it was a no-brainer for them to offer full subsidization to 3G purchasers.

So ultimately, many people are expecting to get exactly the same full subsidization "special" offer they got with the 3G but there has never once been any promise that they would.

So I say: If you're not happy with the pricing, don't buy the new phone. If you feel bad about the whole situation, at least try to fully comprehend what happened and why the 3G's subsidization was not nearly as special as it seemed (AT&T sacrificed zero subsidization from your original contract whereas now they are offering to sacrifice half of the one from the 3G). It's understandable to be dissatisfied with an offer regardless of the terms, but not understandable for people to go all emo over the terms as though they were somehow owed or promised something else when they obviously weren't.

For the record, I intend to pick up a 32gb upgrade for $500 because frankly, I was happy to buy the original 8gb for the full original price. To me it's valuable for the added space alone. Everyone has to make this decision for themselves obviously but at least have the character to realize you are not being ripped off, and you are not somehow owed a better offer just because you really want the phone.

Fandom does not make you special.

A possible compromise

[Mr. Underbridge]

So the issue is that a new model has been released and only people who are eligible for a new phone can get it at a discount? Apple never should have caved on the iphone price change retroactivity, now they can't improve anything without the existing users demanding free upgrades for life.

Yup. All you get by caving in to pressure is more pressure. I'd expound, but I'd fail at Godwin. ;)

I know the iPhone crowd is somewhat enriched in whiny emos and self-entitled types (before anyone flames, I said *enriched*, not that it describes all of them), but still - what other community would react with such moral outrage that they have to actually live up to their contract? Under what scenario did they think they would be eligible for a *subsidized* upgrade for no reason?

The winning strategy for Apple/AT&T is to charge them $20 to switch phones, put their contract back to two years, and charge them the new subscriber price plus the pro-rated portion of the discount on their remaining contract. So if they've been under contract for a year out of the two, give them half the discount, add $20 to switch the service, and put them back at a year. The consumer gets a fair deal and AT&T and Apple make money.

Confused Definition

[afabbro]

'This is ridiculous and slap in the face to long-time loyal iPhone customers like me who switched from T-Mobile and the only reason was the iPhone,' writes one unhappy iPhone customer.

Long-time? Even if you bought an iPhone the day it was released (June 29, 2007), you are not yet at the end of your initial 2-year contract. How "long-time loyal" can you be?

I refuse to pay for high fashion

[C_Kode]

I refuse to pay the idiot premium on high fashion items, and that is exactly what Apple's products are.

Someone that the actual value of the 32GB is $699 so you're still getting a deal. I bought my Thinkpad Z61e that I'm posting this comment with for $650. I don't think there is a phone on the planet worth $700. To even make that excuse is lame.

I'll stick with whatever device does what I want it too without spending laptop money on it.

Re:I refuse to pay for high fashion

[RyuuzakiTetsuya]

I refuse to pay the idiot premium on high fashion items, and that is exactly what Apple's products are.

Because my MacBook's BSD based kernel goes great with my Dolce and Gabanna sun glasses and my MacBook's user security just absolutely matches DKNY's latest for the 09 season.

Re:But,

[myyrk]

what about those of us who bought the iPhone at full cost ($599) the first week it was released. Why the fuck do we have to pay the same monthly fee as if we were paying for the more recent subsidized phones? Why do I have to pay for unlimited Data when I'v never used more than 500 MB in a month? (Why does EDGE suck so bad? Why does it never work when I need directions or a phone number?) Why the fuck do I have to pay for minutes I never use? Why can't I apply my rollover minutes as credits toward my phone bill? Why do I love my phone, buy hate everything about my service? Why am I stupid enough to pay $900 a year for service that is so flaky?

Unless AT&T can address my concerns, I don't really care how much the subsidized phone costs. Unless the TCO can come down to a reasonable price and the data features actually work when I need them, I will not be renewing my contract -- not even for a new subsidized phone.

I'd rather pay for the hardware and decent service than to keep throwing away money at service that doesn't meet my needs.

You answered your own question with a question:

Why am I stupid ...

you are just too stupid to realize it.

What a Wonderful World it Would Be

[spoonboy42]

Of course, it would be lovely if we could dispense with the entire status quo wherein mobile carriers subsidize the cost of phones to lock people in to long-term contracts. I'd gladly pay more for unlocked smartphones if it meant I could pay less for service (you'd better believe the cost of all those handsets is built into your bill) and switch at-will.

Now, it's true that you can buy some unlocked phones today, but it's far from the ideal situation for several reasons:
1. The price of unlocked phones is substantially above the wholesale price which phones are sold to the carriers for (I don't expect a volume discount like they get, but a few hundred dollars markup is a bit steep).
2. Some phones simply aren't available unlocked without going to the grey market, including the iPhone. That's because a lot of the most appealing phones (I'm debating an iPhone 3GS or an HTC Magic for my next) are offered as "exclusives" for a single carrier. That means that, in my region, if I want a particular phone, I'm stuck with AT&T or T-Mobile, respectively, for service.
3. No price break on service. If you bring your own phone to play, you're still paying the extra that would cover the cost of a carrier-provided phone, which in this case is pure extra profit for the carrier.

Now, just imagine if a similar situation existed with TVs: you only get a cool new TV when you sign up for an extended cable or satellite contract, and you're then locked into using that TV with that provider. You'd also have to consider the tradeoff between the features you want in a TV and the coverage and quality of service you get. In other words, it would be an intolerable, fragmented mess.

But the service providers love vendor lock-in, and the phone manufacturers are only to happy to collude with them. It would probably take regulatory action to cut this particular knot. It's not impossible (remember when the FCC finally forced the mobile carriers to implement cell number portability, then they all advertised it as a great new feature), but I certainly wouldn't hold my breath for it.

Income statement != iPhone profit margin

[nobodyman]

If you honestly think that you can take an income statement from the whole of AT&T and extrapolate the iPhone profit margins you are out of your mind. For all we know they are losing money hand-over-fist in one area and are compensating with obscene markups on iPhones.

Instead, let's go with what we know. We know the unsubsidized price of the phone is $200 more than the new contract price. So we can safely assume that $8.33 a month of your bill is going towards paying off your "loan".

I really wish that the market was just fundamentally changed. No other industry can get away with this shit. Would you be willing to "buy" a new Prius for $15,000 so long as you were forced to gas up and Toyota dealerships at $10.00/gallon for the life of the car? Hell no. Yet that's what were doing with phones. And people seem to love it.

Re:Income statement != iPhone profit margin

[MikeBabcock]

Bad question -- Prius purchasers are almost implicitly looking to save on and minimize gas usage.

What if you could buy a Corvette for just $10,000 but had to gas it up at GM dealerships for twice the price per litre? I bet a number of people would go for that option. Those same people would want the new Corvette model next year when it comes out too.

Re:Whoa! ATT sucks balls?

[SaDan]

Yeah, replying to an AC, but I have a G1, so here goes:

A.> Yeah, it can. Like run multiple applications at the same time that sustain network connections when you background each application. Try running several SSH connections at the same time off of the iPhone, and switching to the browser and back.

Poorly coded base OS? You mean the one that came with cut and paste support the minute it hit the stores? The one that supports Flash? A micro-SD card slot? The one you don't have to use iTunes with to transfer content because it will show up as a USB drive on almost any modern computer?

B.> That's your opinion. Personally, I'd rather have form over function if it means getting the job done. The G1 has an excellent keyboard, compared to what you get (or don't get) with an iPhone. Why give up screen real estate for a lesser on-screen keyboard?

C.> Go pay your phone bill. Enjoy the cost of that data plan!

D.> Let's hope it's free like all the other apps I have loaded on my G1.

The iPhone works for a lot of people, including some of my friends. The G1 works better for me, and I have no problems with T-Mobile's network. As far as 3G goes, I have it disabled on my phone to save battery life. I have no issues using 2G speeds for my needs.

If you want REAL speed from a cell network, then neither AT&T or T-Mobile can offer what Sprint or Verizon can with their EVDO networks. It's not even a comparison, provided you have the coverage.

Re:anonymous coward angry over first post

[Trahloc]

This is perfectly normal, they give a $200 discount so people sign a 2 year agreement. A few give reduced discounts before the contract is up but a majority only give discount prices when your out of contract. Anyone who doesn't understand this and feels its a 'slap in the face' should grow up, it's not like they hide this fact at signup.

Would you like some cheese with that whine?

[davmoo]

What the hell, I've got Karma to burn...

Apple/AT&T release a new phone and only new customers and customers with contracts about to end get it for upgrade pricing. Others are crying.

Guess what, cry babies...that's just like every other carrier in the US does. Its the industry standard here. Why did you expect different from AT&T and His Holiness Lord Steve? Contrary to what you think, you are not better than everyone else. Welcome to the real world.

Re:anonymous coward angry over first post

[harryandthehenderson]

How is AT&T supposed to make money giving away subsidized phones before they pay back the ones they've already subsidized?

The overpriced data plan that they force you to sign up for?

Re:anonymous coward angry over first post

[Trahloc]

Simple answer, go with a different carrier. MetroPCS for instance is cheap with unlimited calls, no contracts, and inexpensive phones (compared to the major carriers undiscounted price). Oh yeah you can't use the phone coast to coast with a whole bunch of dead spots. You also don't have the option of purchasing phones directly from them with any decent features, they're all rather basic unless you transfer a sprint/verizon phone. Thats the sacrifice for going with a carrier that doesn't screw you. They aren't as good, but I prefer paying them and dealing with their short comings than paying cingular/at&t/verizon/sprint greater prices with annoying contracts.

The other baffling thing about this

[sean.peters]

The general consensus is that people are being crybabies over the fact that they're being held to the contracts they signed, presumably of their own free will. No argument here. What baffles me is why people are even up in arms about upgrading - the differences between the iPhone 3G and 3GS are not really earth shattering - you can get a bigger capacity (up to 32 GB), autofocus camera, and the magnetometer... and that's about it. After all the hype over the new phone, I was pretty underwhelmed. Disclosure: I'm an iPhone 3g owner, and I'll be waiting until the next version to upgrade.

Tough shit.

[JasonEngel]

I completely agree with that post's final sentence: "If you want to upgrade early then you will have to pay full price with no subsidy discount. You can't blame anyone but yourself for your predicament." Every American cell-phone user knows this is standard practice. If you want to buy a new phone from your provider before your contract is up or your upgrade option renews, then you pay the non-subsidized price. I simply do not feel the slightest bit sorry for these whiners who feel that buying an iPhone last June/July somehow makes them special.

Re:anonymous coward angry over first post

[The_K4]

So Assume someone got a iPhone 3G on July 11 last year (launch day). That's 11 months So AT&T's Early Termination fee is $175 - ($5 * 11) = $120 So pay the $120 and port your number to a cheap pre-paid. Then once you've paid the fee and closed the AT&T account go back as a "new" customer and get the $200 discount! I left my last cell phone provider and moved to a new one simply because when my phone died with 6 months left on my contract it was cheep to break the contract and buy new phones with a discount at a different provider then to replace the broken phone. I figure using this method people could save $80 (but it may mean being without a working iPhone for a couple of weeks). As a side note, about a week after I ported the numbers I got a mailing from the original provider offering me the "2-year contract price on new phones" and 10% off my old plan if I would come back. Not sure if AT&T does this, but after you port the number you my find them willing to play ball to get you back, but YMMV.