Filed under: Analysis / Opinion, Apple, iPhone
iPhone 3G owners and AT&T upgrade woes
With the introduction of the new iPhone 3G S at WWDC, existing AT&T customers who wish to upgrade to the new model are quickly finding out that they are not eligible for the pricing announced today.If you were among the first 10 million customers to pick up the original iPhone, and you have not upgraded to the 3G, chances are your AT&T account lists your iPhone as eligible for an upgrade. But for many users, this is sadly not the case. Several readers have written in, letting us know that AT&T is not offering upgrade pricing for existing iPhone 3G owners, and is asking $599 for the new 16GB 3G S, or $699 for the 32GB model. Others have things a little easier, with AT&T offering $399 or $499 upgrade pricing. Now that's definitely not the rosy picture that was painted on the slide at WWDC this morning, is it?
So what can you do if you want to upgrade? Well, you might have a few options. For starters, the typical contract cancellation fee is $175. So, depending on your plan, you may be able to save some money by just canceling the contract, then purchasing the iPhone as a new contract. Keep in mind, by doing this, you'll probably need to wait 90 days or so to sign-up with AT&T (in your name anyway) and you'll lose your existing phone number.
You might also want to consider adding a new iPhone as an additional line to your account. If you don't have a spouse or family member to share your existing iPhone 3G with, the additional monthly fees for the new iPhone 3G S probably won't end up saving you any money (in fact, you can pretty much guarantee it won't), but if you want a new iPhone and have a person you can share your existing iPhone 3G with, this might be an option.
Upgrade screen for an AT&T customer just a couple of months shy of the 18-month threshold.
Finally, you can always resort to the old standby method: subsidize the cost by selling your existing phone. Since the hardware changes are fairly minimal with the new model, it's a safe bet that the 3G will still be in good demand, at least for a little while. Chances are pretty good that you can recoup some, if not all, of the cost of the new phone by selling your old 3G after you have upgraded. This is particularly true for 3G phones that have been jailbroken or unlocked. Even though the 8GB iPhone 3G will be selling for $99, users who want to use a phone without a contract or potentially with another carrier are foaming at the mouth for the iPhone.
Keep in mind that these are just suggestions, and may or may not work for everyone in all cases. If all else fails, talk to someone at AT&T. You might just get lucky and find someone who is able to help you out. If you want to wait out your existing contract, it appears that AT&T will approve you for upgrade pricing 18 months into your contract. So if you got an iPhone 3G last June, you can look at upgrading to the iPhone 3G S at the end of December.
Will you be upgrading your iPhone 3G to a 3G S, despite the steep price, or will you wait until you are eligible to upgrade? Let us know in the comments!
Update: As many of you have pointed out in the comments, much of the reasoning behind this is due to the fact that the 3G iPhone's cost was subsidized, meaning that AT&T could sell you the phone for a lower price, while locking you into a two year contract and recouping the remainder of the phone's cost over the length of that contract. In contrast, the original iPhone's cost was not subsidized, which allowed more flexibliity to those wanting to upgrade their phones early.
In all fairness to AT&T, this is the same practice that is followed by most other carriers around the world. However, much of the confusion comes with the fact that many customers were allowed to upgrade to the 3G last year if they owned the original iPhone.
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Reader Comments (Page 1 of 12)
Matt said 5:36PM on 6-08-2009
Think At&t dropped the ball on this one (not surprised at all) Could've gotten everyone to sign a new 2 yr agreement for what is only a minor upgrade to the hardware
Reply
Yahhoun23 said 5:41PM on 6-08-2009
I tend to agree, but look at it from their viewpoint.
People will buy the new iPhone regardless. They realize if Apple releases new iPhones, everyone is going to be getting 2 year contracts. So we're all paying a premium price while still adding a 2 year contract. It's the perfect situation for them and the worst for us.
Of course this is nothing new with cell phone companies in the US. Unfortunately they treat the iPhone crowd as no different.
Mike Vaia said 6:08PM on 6-08-2009
Once again, AT&T shows what gentle blokes they really are (not that anyone was shocked anyway). I miss the days when you could walk into an Apple Store and purchase an iPhone to take home and "activate ... More ".
For the record, I wouldn't even BE on AT&T if not for the iPhone. They should be bending over backwards for iPhone owners, not sticking it in their gentle pockets.
totoro said 6:14PM on 6-08-2009
@Yahhoun23
I bought the original iPhone, and the 3G. But I'm not buying the 3GS at that price. So,
"some" people will buy it, regardless. And some of us now will wait for the next version, which hopefully won't run just on AT&T. So both Apple and AT&T lose this round, at least for me.
Kid Dynamic said 7:20PM on 6-08-2009
Give me a break, you guys. The only reason we got a price break the first round of upgrades was because the original price was the FULL cost. The 1st gen iPhone was fully paid for by you the day you bought it. So it's no loss to AT&T if you upgrade.
But you didn't want to pay full price the next time around, so you signed up for a 2-year contract. So AT&T gave it to you for half price, upped the data plan $10 and amortized the difference over the 2-year period.
So, technically, you haven't finished paying for your 3G phone yet. So why would they give you a new phone?
This is no different than if you had any other phone from AT&T. It's all the same contract, so they can get their money back (and a little extra, I'm sure).
When you sign a 2-year contract, you should expect to ride it out for 2 years. That's how it works.
cheetahkayak said 8:04PM on 6-08-2009
I talked to an ATT operator. They said they might be announcing something in the next couple of days, but right now I have a 499 upgrade price. I wanna give my currrent 3G iphone to my wife who has my original iphone now. Wonder what that will cost me.
pintweaks said 8:42PM on 6-08-2009
Instead of paying AT&T $299 I wanted to for the 32GB iPhone (before I found that I don't "qualify" until September), I'm right on the edge of paying them $175 to kill my contract. This makes no sense to me whatsoever. They've only managed to piss a lot of people off and potentially lose quite a few customers.
Scott R said 2:30AM on 6-09-2009
Forgive me for asking a rational question, but: if the hardware changes are minimal, why do people seem to care so much about getting the standard upgrade price before they're contractually due to receive it? I mean, I'm just saying.
Robo said 2:59AM on 6-10-2009
to "Kid Dynamic"
So after my 2 year 'subsidy contract' expires and I renew, my monthly bill should be less, right?
Oh wait, that excuse is bullshit and conveniently works one way and not the other.
It isn't like AT&T actually paid $500 or $600 for your phone, people. Don't be so damned naive and quick to believe bullshit about a subsidy...
That mentality is why we are all commonly in this predicament with cell phone service providers anyway.
Example: How about my text service that actually isn't costing AT&T a dime...why is that $15 a month again?
BigTomTom said 10:10AM on 6-12-2009
Here's my take... I didn't have a problem with the $100 rebate Apple gave original iPhone owners after it dropped the the price on the iPhone 2 months after it was released. I also didn't have a problem with allowing customers to upgrade to the 3G for $199, because they paid full price for their phones to start with. And honestly, I don't have a problem with 3G owners who got their phones at a discounted price to have to pay full price this time around. The problem I have is making it some kind of blanket policy for ALL existing 3G owners to pay full price.
Let me explain... I signed up with AT&T last year in anticipation of the 3G. I purchased a phone and signed a contract a little less than a month before the 3G was released. Why? I was with Sprint for 10 years and completely not satisfied with their customer service, and my contract with them expired in June of last year. But the 3G was sold out at every AT&T store I went to on the release date. The 30 day exchange policy expired on the phone I purchased, so I was stuck with it for 2 years. Now here's where it gets interesting. I upgraded to the 3G in February, but I paid FULL price for it. Two weeks later, my wife accidentally washed it in my jeans. Not Apple or AT&T's fault, but I had to replace it at FULL price again! I bought two iPhones at FULL price! Why can't I get a subsidized price? I like the iPhone, and it's the reason why I went to AT&T instead of Verizon or T-Mobile. I just want a break somewhere. AT&T doesn't have to recoup any money they have to pay Apple for subsidizing my phone, because I paid full price for it, TWICE. The only thing about this whole thing I find unfair is locking you into a 2-year contract even though you paid full price for the phone. At least with Sprint or Verizon or T-Mobile, if you pay full price for a phone, you are NOT obligated to sign a 2-year contract...
Josh said 5:37PM on 6-08-2009
AT$T continues to suck... big surprise
Reply
Squid7085 said 6:07PM on 6-08-2009
Why? How is it different from any other phone that AT&T offers, or in contrast, any other American carrier. You sign a contract for 2 years saying you will keep that phone for two years. That 2 years pays off the subsidy on the phone. Why do you think AT&T should offer you a 2 year contract pricing when you have only fulfilled one year of the original contract. AT&T is being nice even offering some kind of deal off the phone, the thing that makes sense would be to sell it outright to anybody who is not eligible to sign a new contract. I far from like AT&T, but you signed a contract with them, they aren't doing anything wrong, be happy you can possibly get it for $399
kreilein said 6:56PM on 6-08-2009
Actually Squid, I am surprised. It's a more expensive data plan and includes no texting plan at all so you're paying a premium to own it and that should be recognized. Plus, there is a WORLD of difference between paying $200-300 to upgrade a to a Blackberry early as opposed to paying $600-700 to upgrade to, what is by all accounts, a pretty minor hardware upgrade overall.
In THIS economy, asking people to drop $700 extra on your BIGGEST money making item in the past 20 years that kept you out of fading into one of those companies that used to be an American icon (a la GM) is certainly, at the least, arrogant and tacky.
Kid Dynamic said 7:28PM on 6-08-2009
Um... what does the "economy" have to do with it?
superberg said 10:21PM on 6-08-2009
Squid: I have a G1 on T-Mobile. Unlimited 3G data and unlimited texting runs $35. I get unlimited talk for $50.
There have been plenty of studies showing that text messaging is grossly overpriced. Every time a new iPhone launches, I consider switching, and every time I see the cost I just stick with what I have. Another carrier, another phone.
kreilein said 11:02PM on 6-08-2009
What does the "economy" have to do with it? Did you really just ask that? Wow, need to get out from under the rock.
Well...let's see if I can break this down...
With ~10% unemployment, foreclosures on poeple's houses (ya know, the thing they live in) up, car repos up, stock portfolios and interest rates down, people taking fewer vacations killing the travel and tourism industry in the US, and the loss of more jobs on the horizon once GM/Chrysler finish up, and AT&T even cutting their own Staff due to the slow economy, I think it's a bit "arrogant" and "tacky" for AT&T/Apple to ask people to toss down $700 for what is by all accounts, a fairly mild update to the iPhone hardware.
Think those thousands of employees that AT&T laid off a while ago who got iPhones as a bonus are gonna take their entire weekly unemployment check (2 weeks worth in NY...trust me...I was on NYS unemployment for a while after my layoff) and put it towards an iPhone?
I'm not saying they won't make billions, and I'm not saying that I won't get it once the price comes down and my contract is up, but if they're trying to keep the iPhone "steam" alive, and get people who already have a perfectly functioning one to buy a new one, I think they're gonna lose a LOT from that group. They lost mine and many others here. I'd do it for $299 and an extension of my 2-yr deal, but I'm not going to just give them $200 extra for nothing just to get it on 6/19 instead of 12/17.
Just saying, it's a bit tacky considering loyalty to the iPhone and AT&T is what has kept AT&T, for sure, and a BIG chunk of Apple afloat and growing in this recession.
--Ed said 12:38PM on 6-09-2009
@kreilein
So the question again is "what does the economy have to do with it"?
If you are unemployed, house getting foreclosed on, car getting repoed and all the other stuff you are whining about YOU DON'T NEED A NEW PHONE AT ANY PRICE!!!!!!
I have a job, my car is payed off and I have no other debt except my house and I will gladly pay $399 for a new 32gb iPhone.
Why do iPhone people feel they are privileged to new contract pricing when they knew all to well that they signed a 2yr contract a year ago?
So either pay what they are asking or wait till your contract is up.
Travis said 5:37PM on 6-08-2009
Does anyone know if I already have a Family Plan can I add a new line to that family plan without increasing the current plan price? So I would have 3 (one new line) lines but still keep the same family plan I have now?
Seems that would be the cheapest way to get a new phone if it was possible
Reply
Yahhoun23 said 5:41PM on 6-08-2009
From what I understand, you could at an extra $40 a month on top of your current bill.
That is unless they change the pricing for some reason.
Soulquarian said 5:43PM on 6-08-2009
I think it's an additional $10 a month for each line, but I'd just call the nearest AT&T to make sure.