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

[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

[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

[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

[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

[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

[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

[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.

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

[MillionthMonkey]

iPhone owners have been known to eat their young.

There's an app for that!

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.

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?

[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.

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: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"?

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.

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.

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?

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: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.