Skip to Content

iPhone 3G may be sold unsubsidized

Will the iPhone be sold unsubsidized? That's the conclusion I'm coming to as I read between the lines of this AT&T Memo to Retail Managers. The money quote is this: "However, not all customers will be qualified upgrades. AT&T has not determined the price of the 3G device for non-qualified upgrades." If I'm reading this right, AT&T will sell off-contract iPhones at a yet-unspecified price.

If true, this is terrific news for anyone who wants to hack their iPhone and not be bound to an AT&T contract. It's also fabulous news for anyone who wants to upgrade to a new iPhone but doesn't live in a 3G-serviced area.

If historical prices are any indicator, off-contract phones could sell for a few hundred dollars above the subsidized price. At the very least, according to this memo, you can sign up for a contract, get the iPhone and cancel after 30 days, paying the early termination fee. After that, the iPhone is yours free and clear. I am not a big fan of this option as I do not like signing contracts that I do not intend to keep. Regardless, this is (a) legal; and (b) in compliance with contract terms.

Thanks, Ethan Hixson.

TUAW reader Rawheadz writes: "The money quote is that you DON'T have to return the phone after the 30-day return period, so long as you pay the early termination fee; so, essentially, the "unsubsidized" price for the iPhone 3G is going to be $199 + the ETF." To which I add, plus one or two months of service.

Other readers clarify that "non-qualified upgrades" refer to existing non-iPhone customers who have not yet finished their equipment terms and would be expected to pay a penalty for equipment changes.

Although I wonder if it would be cheaper just to buy a foreign iPhone, I'm still hoping that Apple sells them in-box unactivated at their store. And there's got to be some sort of developer solution that doesn't involve contracts for each development unit.

Here's some math from TUAW reader Mike:

$199    for iPhone 3G
$ 36    to activate
$ 80    approximate, one month service plus taxes
$170    Early Termination Fee
That adds up to about $485 + tax for a 8 GB ($585 + tax for 16 GB).

Categories

iPhone

Will the iPhone be sold unsubsidized? That's the conclusion I'm coming to as I read between the lines of this AT&T Memo to Retail...
 

Add a Comment

*0 / 3000 Character Maximum

45 Comments

Filter by:
Nathan

For those looking to use another carrier the 8-gigabyte iphone will cost $599, the 16-gigabyte version will cost $699. AT&T wants you to stick with them otherwise there is no reason for such an excessive price.

July 05 2008 at 2:40 PM Report abuse rate up rate down Reply
Lyss

What about the fact that AT&T is limiting each customer to purchasing 3 phones? If this is the case..then does it matter if you are not eligible for an upgrade...can't you just get someone who is eligible to pick one up for you too? And if they really are limiting the purchase to only those "eligible," then why the limit of 3? Shouldn't it be a limit for 1 for each eligible customer?

June 19 2008 at 12:10 PM Report abuse rate up rate down Reply
Rego

Erica says:
If I'm reading this right, AT&T will sell off-contract iPhones at a yet-unspecified price.

Sorry -that conclusion does not seem to be justified according to the wording of the memo.


This seems to be the part of the memo that is being discussed:

"Upgrade Eligibility and Qualified Upgrade Pricing
Upgrade eligibility will be determined based on standard upgrade eligibility rules. Customers must be upgrade eligible to receive the qualified upgrade pricing. However, not all customers will be qualified upgrades. AT&T has not determined the price of the 3G device for non-qualified upgrades.

All customers will be required to sign a 2-year agreement. There will not be a "no commitment" price for the iPhone 3G.

Note: When the 3G device launches, all active postpaid customers in good standing with a 2G iPhone will be eligible to receive the qualified upgrade pricing for a 3G device regardless of service tenure. (Customers that would not otherwise be eligible due to tenure will be made eligible at launch)."

Nothing in the memo talks about a non contract or off contract iphone.

Here is my take on this:

1. Anyone can buy a new 3g 8gb iphone for $199.00 with a 2 year contract (assuming they are
credit qualified.)

2. Anyone who owns a 2g iphone on an Att plan who is in good standing will be upgrade qualified.
(Note: When the 3G device launches, all active postpaid customers in good standing with a 2G iPhone will be eligible to receive the qualified upgrade pricing for a 3G device regardless of service tenure. (Customers that would not otherwise be eligible due to tenure will be made eligible at launch)."

3. "Upgrade Eligibility and Qualified Upgrade Pricing
Upgrade eligibility will be determined based on standard upgrade eligibility rules. Customers must be upgrade eligible to receive the qualified upgrade pricing. However, not all customers will be qualified upgrades. AT&T has not determined the price of the 3G device for non-qualified upgrades.

They don't say what the upgrade eligibility rules are for people other than those in the category
in #2 above.

No price determined for non qualified upgrades- doesn't mean a non contract phone- it means whether they will allow you to replace your current contract with a new 2 year contract plus $199.00 and whether they will do that with or without a penalty or premium?

In a worse case scenario one could presumably
cancel the current contract and pay the early termination fee
ETF (check your specific contract for details)

So again nothing in this memo says anything about an off contract iphone.

If I was under contract with Att and
I was deemed non qualified for upgrade
I would go to an Att store and tell them to either upgrade me- meaning I pay $199.00 -they cancel my old contract and I sign a new 2 year contract- or I will cancel and go with another phone at another company and they lose me as a customer.

The reps want to sell a new 3g iphone and 2yr contract -they get a commission- they will be motivated to help me get what I want.

June 12 2008 at 5:29 AM Report abuse rate up rate down Reply
Chris Turpin

So I guess I'm not eligible. That sucks madly. I'd totally buy an iPhone 3G if I could get the $200 dealie.

I've been on my contract since mid-December 2007. Looks like my best chance is finding a friend to sign a two-year and throw them $200, then giving them my AT&T phone.

June 11 2008 at 5:25 AM Report abuse rate up rate down Reply
mwdelta

Nobody is including the right things when calculating the price a non-AT&T person would pay to get a 3G iPhone. Here it is:

iPhone 3G -------- $199
Activation Fee ---- $36
1mo svc + tax --- ~$80
ETF --------------$170

Total: $485 + tax, or $585 + tax for 16GB.

That's using the minimum service plan, although AT&T may require you to buy a $59+ plan or higher.

June 10 2008 at 1:59 PM Report abuse rate up rate down Reply
Adan

This is my new thought...

Let's say at&t will charge users not eligible for an upgrade (w/ out 2g iPhone contract) an extra $200 for the new iPhone. Let's say today I buy a used/refurbed iPhone for $200, and add that to my plan (the $20 data), therefore making myself a 2g owner.

Then come July 11, I can buy the 3G iPhone at the $199 price, and have the extra 2g iPhone, paying the same thing I would've not being eligible for the upgrade in the first place. And maybe selling that unlocked to someone recouping the money I put in for the original (or give it to my gf who doesn't need 3g/GPS)

June 10 2008 at 1:08 PM Report abuse rate up rate down Reply
CZ

Screw it. Until they can deliver an iPod + Mobile Phone device that costs less than $40 a month to operate, I won't bother. I don't need all those minutes and a lot of the extra features. Sure it's nice to have them, but why should I pay for something I'll never need?

I guess I'll just be have to learn to be happy carrying an iPod *and* a separate, sane-rate cell phone.

If the phone + data also included DSL for when I'm at home, I might consider it a decent value, but $70 for service I'll only use sporadically is a rip-off. It might be great for day-traders and businessmen, but for someone whose career doesn't depend on being on the phone all day, it's a waste.

They'd better damn well lower the price of the iPod touch.

June 10 2008 at 1:05 PM Report abuse rate up rate down Reply
Barry

Current 2G iphone owner looking to upgrade, then I went on AT&T site and looked at 3G coverage. Where I live not covered still be on edge network almost all of the time, so upgrade not really a smart thing.

June 10 2008 at 12:45 PM Report abuse rate up rate down Reply
Markus

Developers. Please file bugs!!!
I recently filed a (polite) bug, where I told apple that the iPhone is defective by design, when tied to a CERTAIN carrier. They should solve this situation by either selling a boxed version without contract to everybody who wants it or at least offering the iPhone without contract to developers via a hardware purchase program.

So - please file bugs! Every duplicate will help.

And if you are no developer, but a normal customer, tell Apple that you hate AT&T (replace with your local exclusive carrier) and will never ever buy an iPhone, when it is tied to an exclusive carrier. As a customer just use:
http://www.apple.com/feedback/iphone.html

June 10 2008 at 12:37 PM Report abuse rate up rate down Reply
1 reply to Markus's comment
Yakov Chodosh

i think they probably thought this out in advance... Apple makes decisions based on m-o-n-e-y.

As for me, I'm kind of offended that they're excitedly baking Exchange and Office support into the iPhone while ignoring their own product, iWork.

June 10 2008 at 2:11 PM Report abuse rate up rate down Reply
Jay

My "Eligibility" for an upgrade is 8/11/08. Am I going to have to wait a whole month if I want the $199 pricing!? Come on AT&T...I've been with ya for 6 years....don't do this to me.

June 10 2008 at 12:25 PM Report abuse rate up rate down Reply
1 reply to Jay's comment
Yakov Chodosh

OMG your life sucks what are you going to do

June 10 2008 at 2:09 PM Report abuse rate up rate down Reply
Buy an ad here

Hot Apps on TUAW

Tweets

© 2012 AOL Inc. All Rights Reserved.