Filed under: iPhone
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 FeeThat adds up to about $485 + tax for a 8 GB ($585 + tax for 16 GB).
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Reader Comments (Page 1 of 3)
Hawk said 10:39AM on 6-10-2008
one problem with this subsidizing thing is that users who have AT&T right now may have to pay something between the unsubsidized price if they have a contract but aren't eligible for an equipment discount.
That's extra lame. We go from 'everyone pays the same price' to 'everyone but new customers or specially-valid upgraders pay the full price, and eligible minorities get a special new low price'.
Why can't you just get the price if you're on contract no matter when? I got an iphone in january, but now I have to pay full price for an iphone 3G because I didn't wait long enough to subsidize it? That's a joke.
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Christina Warren said 10:57AM on 6-10-2008
If you have an iPhone, you have nothing to worry about. The people that will pay more are people who bought phones, say in March or April, that were not iPhones.
Ryan Trevisol said 11:25AM on 6-10-2008
What about people like me? I _had_ an iPhone which I bought in November, but I'd rather not disclose where it went or how I got this $500 in my PayPal account.
Rafe H. said 10:39AM on 6-10-2008
Slightly off-topic, but if you have to activate an iPhone at purchase time, in the store, then won't that change the holiday buying experience completely?
How can you buy it and give it as a gift?
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dagamer34 said 10:39AM on 6-10-2008
Highly likely to be around $400-$500. Though I'm not sure why it really matters if you live in the US, because only AT&T has a compatible 3G network. Otherwise the first gen iphone would be plenty enough for you.
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Allan said 10:40AM on 6-10-2008
To me it reads more like "if you're not eligible for an upgrade, you can still buy one at an unsubsidized price" and still follows the "must activate in store" rule.
So yes, they'll sell unsubsidized ones, but only to people who don't qualify for the upgrade discount. And it is very likely they'll still have to activate them in the store.
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Johnny said 11:04AM on 6-10-2008
That's what I thought to. Nothing about that statement makes me think they are going to sell them to non-AT&T customers.
The Tuesday Night Tech Show said 10:47AM on 6-10-2008
I heard that it will be next to impossible to crack this version of the phone. Sad news. Too bad the rate plan went up just as the cost came down as well. Greedy, AT&T, greedy.
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crazypenguin said 11:21AM on 6-10-2008
ha ha, there is no piece of technology impossible to crack, its just the difficulty level there is to it.
Jaioxung said 11:23AM on 6-10-2008
I did some quick math and if you bought the original 16GB @ $500 and added the $20 data plan it will actually be a bit cheaper over two years compared to the cheaper 16GB 3G($300) + $30/mo. data plan.
Doink said 12:08PM on 6-10-2008
The 2.0 firmware has been cracked since about 3 days after it was released to developers.
Next...
welchb said 10:48AM on 6-10-2008
Interesting. I got my iPhone the week it came out and signed the contract as per normal, etc.
I just logged in to my account and went to my devices. And under my name (with the iPhone pic next to it)
" This line is eligible for reduced equipment pricing when you sign up for a new 2-year service agreement.
Experience the latest wireless technology with a new phone."
Guess that means they'll let iPhoners upgrade?
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Christina Warren said 10:55AM on 6-10-2008
According to the memo Gizmodo had, yes, all current iPhone owners (assuming their accounts are in good standing) are eligible for the "upgrade"/new customer price, regardless of when they bought their phone, assuming they sign another 2-year contract.
Alex said 11:15AM on 6-10-2008
"New Activation Process and BRE:
The iPhone 3G will be activated at point of sale when the device is purchased, in store. The BRE period will change from 14 days to 30 days and will require the device to be returned to place of purchase before service is cancelled."
Leaked AT&T policy memo, http://gizmodo.com/5014909/att-memo-to-retail-managers-shows-iphone-3g-policy [Gizmodo]
So, the phone will have to be returned if you cancel your contract. Shitty.
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Arno said 10:52AM on 6-10-2008
@The Tuesday Night Tech Show:
Nearly impossible is not realistic. You can hack it for sure, may take some days but it will come.
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MTVAH said 10:52AM on 6-10-2008
It does say that, but it also says, "All customers will be required to sign a 2-year agreement. There will not be a "no commitment" price for the iPhone 3G."
So it looks like existing customers do have to re-commit, only those who are already with AT&T and not eligible are going to pay more for the right to be roped in for 2 more years. Personally, I'd have just preferred an extension on top of what is left for those not eligible.
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Ryan said 2:24PM on 6-10-2008
I would like to believe that this is true however this line seems to imply that there will not be an unsubsidized price...
"All customers will be required to sign a 2-year agreement. There will not be a "no commitment" price for the iPhone 3G."
:(
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mdk said 11:55AM on 6-10-2008
As a note: I called AT&T this morning. Their terms specifically list iPhone users as eligible for the upgrade. That probably doesn't make other AT&T customers very happy... but it does mean that I only have to pay $199 or $299 and then sign up for two more years...
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Bomans said 10:56AM on 6-10-2008
and what about:
New Activation Process and BRE:
The iPhone 3G will be activated at point of sale when the device is purchased, in store. The BRE period will change from 14 days to 30 days and will require the device to be returned to place of purchase before service is cancelled.
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Jon said 10:59AM on 6-10-2008
>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.
I think that might be overly optimistic reading of that quote. As usual it is not clear and while many are hoping for an off contract and unlocked phone, but EVERYTHING else in that memo makes it sound like that is NOT going to happen.
However I believe "qualified" vs "non-qualified" refers to credit rating and whether the existing customer owns a 2G phone. Nothing in that quote refers to CONTRACT.
For example say I have had a Moto Razr for 2 months, I would NOT be qualified for a phone upgrade, where as if I had it for 2 years I would. I believe this is the situation they are referring to.
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