Filed under: iPhone
AT&T to penalize iPhones not activated within 30 days
The iPhone 3G activation saga is quite confusing. Most people think that Apple and AT&T will require iPhone activations on the spot, thereby cutting into a big part of the unlocked iPhone phenomenon. However, this AP report suggests that there will be a way for people to get unactivated iPhones, the only catch being AT&T will slap a penalty on you if you don't activate your iPhone within 30 days. The amount of the penalty, or how AT&T will even know who you are since your iPhone wasn't activated, is unclear.Let's hope that all this confusion clears up a little closer to the iPhone 3G's release.
Thanks, Daniel.
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Reader Comments (Page 1 of 3)
Simon Arch said 5:43PM on 6-10-2008
Chances are they'll only allow sales via credit card and will add a penalty charge in the amount of the Early Termination Fee to the cards of folks who purchase unactivated phones.
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Andrew said 5:53PM on 6-10-2008
Thats exactly what i was thinking. One method i think that apple might do for online sales is just require you to sign up for a contract purchase of phone online
OR they will charge you full price and ATT will give you a 200 dollar credit or something.
Le Big Mac said 5:59PM on 6-10-2008
Agreed -- I know that neither Apple nor AT&T wants to sell the phone at $400 with $200 instant rebate, but that sure would make things easier. You get the $200 credit as soon as you activate online through iTunes, which would cover your first month, if not more (depending on activation fees and all that other junk).
Jason Hung said 6:36PM on 6-10-2008
This is what I'm thinking. Your credit card will be charged for the phone at the time of purchase, but you won't be billed for it until thirty days has lapsed. Apple will place a hold--but NOT CHARGE--your credit card until thirty (30) days has lapsed. If you don't activate, your card will be billed the Early-Termination Fee, but if you do activate, the ETF will be refunded to you.
dagamer34 said 9:12PM on 6-10-2008
If they slap an ETF on you, is Apple just ASSUMING people will unlock the phone? Does this mean they aren't going to fight it quite as hard? It's a bit weird.
Seth A said 5:46PM on 6-10-2008
We were spoiled with the home activation thing. Apple yet again was too far ahead of the curb at the wrong time. The way phones are sold is subsidized with a two year contract, period. I have no issue with having to activate at the store. Its been that way for years. Until the truly open "Pick a Phone, Pick a Provider, Pick a Plan" thing happens, this is the way to do it. Like I said, the future is buying a phone and activating it on your own time with no subsidies, its too soon.
I think it should be simple, only allow the purchase with a credit card, fail to activate it in 30 days? Charge um. Can't pay with Credit Card? Pay the full price and receive a rebate in the form of a Visa Gift Card. It would be great if every phone Apple sells for $199 is guaranteed to meet the 2 year contract. Honestly, I think they should just offer up an un-subsidized phone to do whatever you want. Apple gets all the money, chances are they could care less.
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sujovian said 6:31PM on 6-10-2008
"too far ahead of the curb" That's a new one. what is that, more than halfway across the street? maybe you meant this:
http://www.google.com/search?q=ahead%20of%20the%20curve
Apple has heard a whole lot of complaints over the past year of the iphone being too expensive. Customers are spoiled by the subsidized phones that flood the market, and Apple has fallen prey to this. Once the exclusivity agreements are gone, perhaps then you'll be able to buy iPhone 4.0 for $199, and with a level playing field, take it home and register it in itunes with the carrier of your choice. It's a great concept that is ahead of the curve, but they've only been forced to drop it for the carrier-exclusive subsidy.
Seth A said 7:03PM on 6-10-2008
My mom always used ahead of the curb, oh well. Lol. It really doesn't make sense. Either way, I mean, what can Apple do? They are trying to compete with a phone that sells retail at the same price, but because of subsidies, its hundreds less. Apple has no other choice. Subsidized phones is they way the market works now unfortunately. Sometimes to compete, you have to do what the rest are doing. Apple sold to all the people who were willing to buy it at that price. I bought it at that price, but I told myself the only way I would get the new one is if it were under $300.
The problem is, Apple can't "make" the phone for less than $199, to be price competitive with subsidized phones, they need to do the same. Plus, at least here in America, you are limited to T-Mobile and AT&T anyways. Apple has no benefit to gain by signing a contract with T-Mobile for the new phone. No 3G. Even AT&T's 3G coverage blows.
Dan S. said 9:56AM on 6-11-2008
The phrase you're looking for is "ahead of the curve."
Jonathan Grynspan said 5:55PM on 6-10-2008
And by what right would AT&T be able to fine a customer? If I buy a phone and no plan, I have not entered into any contract where a termination fee, or any other fee, would apply.
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Jeff said 6:02PM on 6-10-2008
Just for reference, and I don't think iPhones will be sold without plans here in the US given what the leaked doc says, there is a way to "fine" after the sale. DirecTV has mandated that every receiver sold requires that the sale comes with a condition that if not activated within 30 days, they can charge you additional fees (meant to cut down on Sat piracy). You agree to that when you buy it - even from an online vendor - so there is one way to make you sign a contract even if you don't sign up for service at the time of sale.
As I said though, I think they will get there way by mandating that a customer pick a plan at the time of sale. I sure do hope they have a streamlined process for doing that...
Jeff
DistortedLoop said 6:08PM on 6-10-2008
The catch is that they won't sell you the phone unless you sign the contract.
I don't approve of the situation, but that's how they can impose a fine on you if you don't activate in a specified time frame.
Jeff said 5:55PM on 6-10-2008
I think the AP was confused. If you check the leaked AT&T memo that Gizmodo posted here:
http://gizmodo.com/5014909/att-memo-to-retail-managers-shows-iphone-3g-policy
you'll see this quote:
"Customers must accept AT&T and Apple Ts & Cs, sign a 2-year agreement, and select the data plan for the iPhone 3G before leaving the store. "
It also has this quote, which I think is where AP got confused (they may not have seen this and just asked questions and tried to put the pieces together later - I trust the accuracy a document like this that clearly spells it all out, assuming it is legit):
"To cancel service within the first 30 days, the customer must return their equipment to the place of purchase (no exceptions).
If the customer cancels service after 30 days, they will be charged the ETF. The customer is not required to return the device to cancel after 30 days."
The quote from the AP story was:
"There would be penalties for users who do not activate the iPhone in the first 30 days, AT&T said, in a move aimed at reducing the number of customers who buy an iPhone and tweak it so that they can use it on another network."
The gist is similar but the specifics are slightly different. AT&T's aim can be achieved by what the leaked doc spells out - charging an ETF for plans cancelled after 30 days. I read the leaked doc to mean that an iPhone won't leave the store without a contract having been agreed to.
Jeff
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Niroshan said 6:10PM on 6-10-2008
AT&T is taking this way too far. Now i'm so dissapointed with this. Apple shouldn't have teamed up with AT&T so fast... when does their agreement end so that Apple can sell their iPhones to any service?
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Rob said 6:27PM on 6-10-2008
Niroshan said...
"when does their agreement end..."
Three years from now. :-(
Niroshan said 6:30PM on 6-10-2008
AT&T is screwing them over... this sucks.
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Lepton said 6:34PM on 6-10-2008
The problem with in-store activation is it takes ten minutes. Hmm, 200 people in line at 10 minutes each.. I hope they streamlined it.
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robogobo said 6:39PM on 6-10-2008
good point. I really hope they get slammed and start changing that dumbass policy on the fly.
robogobo said 6:37PM on 6-10-2008
Everyone knew it was stupid of Apple to team with AT&T- or with anyone, for that matter. Everyone except for Apple, that is. Why they didn't just try it out, sell them unlocked and unsubsidized, is beyond me. I don't have an iPhone yet, and right now the old ones are looking much more attractive. I hate this contract shit anyway, and now they're taking it to an extreme.
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Niroshan said 6:43PM on 6-10-2008
agreed. idk why i sold my iPhone now... oh well i guess.