Apple senior vice president for Worldwide Product Marketing Philip Schiller talks about the video features on the new iPhone 3GS at an Apple Worldwide Developers Conference in San Francisco on Monday.
(Jeff Chiu/AP)Photos (1 of 1)
iPhone owner thinking of upgrading? Cha-ching!
By Andrew Heining | 06.08.09
From the “Bring your rich uncle” department:
The new iPhone 3GS, the faster, larger-capacity, video-capable offering from Apple, has been heralded from Cupertino to Croatia, with attractive pricing that seems likely to draw even more customers to the most popular smart phone on the planet (and away from the just-released Palm Pre).
Something that is well known about the $99, $199, and $299 price points of the new line of iPhones is that they require customers to sign a two-year AT&T service contract, but less-advertised (and in really fine print on the iPhone product page) is the fact that existing customers must pay a premium to upgrade. How much depends on whether you listen to Apple or AT&T.
Apple’s fine print puts the existing-user tax at $400. That’s $499 for an 8 GB iPhone 3G, $599 for the 16 GB 3GS, and $699 for the new 32 GB model, according to Apple.
AT&T is saying that existing customers could be “upgrade-eligible” and pay $200 less. The word from AT&T, via iPhone, Therefore I Blog:
Upgrade eligibility varies with each customer, but in general you will become upgrade-eligible the further you are into your service agreement. Customers can find out at att.com or in one of our stores if they are upgrade-eligible. If you are not currently eligible for an upgrade but still want iPhone 3G S, we can offer you an early upgrade price of $399 (16 GB) and $499 (32 GB).
TechCrunch’s Nicholas Deleon calls the pricing “100 percent ridiculous,” and recommends current AT&T customers call the company to get an answer on what they’d pay to upgrade.
Deja vu?
Apple and AT&T ran into similar criticism when they dropped the retail price of the original iPhone in September 2007, just over two months after its launch. A $100 Apple Store credit was offered to assuage those who purchased the phone at its original price, but early adopters – including Apple cofounder Steve Wozniak – were still upset.
Will a similar price drop surface before the new iPhones go on sale June 19?
<< Apple unveils faster and cheaper iPhones | MainComments
2. attorneygirl | 06.08.09
Apple and AT&T have made a BIG mistake.
Charging existing loyal Apple iPhone users $699 to get the new 32 GB 3GS iPhone is highway robbery.
I will sell my 16 GB 3G Apple iPhone on ebay, pocket the money, and walk from my AT&T contract.
Screw that company. I don’t want to give them another dime.
Apple is making another HUGE mistake.
Penalizing loyal customers. And I’m an Apple stockholder.
You want to piss off an Apple stockholder? Go ahead. I’ll stop spending and investing.
5. Gary Osburn | 06.08.09
Companies are urged by the public to upgrade their products. More features for the same or less money. Then we (the public) strongly criticize them for charging for the upgrade. What we seem to expect is more features for no money.
If Apple (or Amazon with the Kindle) gave away hardware to everyone who ever bought their products, they would soon go broke. Then there would be no new hardware.
It is frustrating. I have been buying PCs and Macs for a long time. It seems that the minute I invest money in something new, it becomes obsolete. This isn’t new, nor is it only Apple. Think of the PC over the last twenty years. We get a lot more now than we did then for the same money, but as for me, I have invested a couple of grand every couple of years, because I like being on the leading edge.
If you don’t like funding the research and engineering to build new products, then wait for them to go down. See, if you had waited just a little while you could have saved $99 on that 8gb iPhone. You could probably get a gen1 for way less than $100.
6. Nathan | 06.08.09
This is a crap deal for existing customers, no doubt:
But I don’t believe that anyone who’s been using an iPhone for a year would switch back over something like this. It’s that much better. The Pre isn’t really a competitor, it’s just the first offering that’s not laughable next to the ease-of-use of the iPhone.
7. John | 06.08.09
I’m hugely disappointed at the existing customer treatment being shelled out by ATT. I’ve been a customer for nearly 10 years and just bought an iphone this year for $200…now the exact same phone is $100 less! This is the kind of dishonest pricing schemes that every ATT customer should be up in arms about. Apple is too good of a company to let its products be tarnished and its existing and loyal customers be ripped off like this. Apple offers snow leopard for $29 to existing leopard users…but ATT wants to rob me blind?
8. Frank Castle | 06.08.09
What don’t people get?
You bought the other iPhone at a SUBSIDIZED PRICE in lieu for a 2 year contract. That is how the wireless industry works, the cost you didn’t pay up front are put into your monthly cost over 2 years!
So now you want the new shiny iPhone and expect to just pay for advertised price? Anyone who’s been around mobility long enough knows those prices are reduced with a wink.
The other iPhones would have similar pricing without the at&t discount due to new contract.
9. NC919 | 06.08.09
AT&T website has 3G iphones: 8G = $99 16G = $149 (for existing customers)
No pricing or mention of 3GS on their site.
06/08/09 at 8:30 pm EST
10. Diggy | 06.08.09
This is rather disappointing. I have been an advertisement for how awesome the iPhone 3g is for 11 months. I know that I have personally led to at least 4 to 5 people deciding to purchase an iPhone 3G and in a few cases this meant switching from Verizon to AT&T. While I realize that making and developing these phones is expensive, a hats off to the existing, supporting customer base would be nice. How about a special tier of pricing just for existing iPhone customers who aren’t eligible for the discounts of only $100 more, so $299, for the 16GB and $399 for the 32GB. It will kind of bother me that there will be a whole bunch of new users walking around with cooler phones than me because they waited, but not enough to shell out $399 for a 16GB version, but probably $299 worth of bitter…
11. Jeff | 06.08.09
I don’t believe that just because a new/better version comes out, that anyone should be able to upgrade. Unless you were one of the purchasers of the original iPhone at FULL sticker (read non-subsidized) price, it doesn’t make sense that AT&T should just let you out of your contract so that you get the latest and greatest. If you purchased your iPhone at $199/$299, you got it at that price because AT&T subsidized the price of the hardware. Now you can argue about how much the hardware actually costs, but that is not the point. AT&T’s business model is based on that price and the price of your service package for the two years of contracted service. That being said, I don’t see why we shouldn’t be able to get the new model as long as we commit to EXTENDING our existing contracts by another two years. Or in the case of the very early adopters who purchased at the non-subsidized price of $399/$499/$599, a NEW two year contract. Unfortunately, I don’t see either side in this scenario being reasonable. The consumer thinks that they should get the latest and greatest at the ‘new customer’ price regardless of their financial obligations and the corporation telling its loyal customers, “Tough, you can just wait until your current contract runs out!”
12. Upset in NM | 06.09.09
ATT is just ridiculous, I’m really thinking of just getting the pre and canceling out my contracts! This is how they treat LOYAL paying customers!!?! It’s just ridiculous and if Apple was smart they’ll steer away from ATT ruining their reputation. Apple prices go down, but then ATT goes ballistic with pricing?! Come on…499? for a 99 dollar phone?! Crazy!
13. Jason | 06.09.09
I have no problem with leaving AT&T if they want to pull thi scrap. I just signed up with them and bought the iphone. Now there coming out twith this new one and I have to pay almost full retail? I have no problem buying out of my contract. i still have a verizon contract to so ill just go back to them,, see ya later AT&T.
14. jason | 06.09.09
I find the entire evolutional history of the iphone to be questionable. Just as it mainstreams and is a hit with a true following, Apple upgrades and re-releases the same phone with minor changes….why, because they know people out there will pay for it. Loyal customers who want the newest and best will upgrade and Apple lures in new customer at the same time. Its a good marketing ploy but I do agree in the fact that it is also underhanded and robbery to ask such high prices. Anyone remember the article about how the ipod itself costs about $22.75 to produce and they charge up to $250 for a nano!
15. Deena | 06.09.09
I went to upgrade yesterday from the *original* (read: full price, before contract renewal subsidies were ever offered for the iPhone, and on the *gasp* Edge network) iPhone to a $99 3G and they said they were “waiving the upgrade charge today.” It sounds like this maybe a ploy to be able to put the iPhone “on sale” certain days / weeks / months without ever having to drop the price - just the upgrade premium - since we all know that Apple products rarely, if ever, go on sale.
16. Tracy | 06.09.09
I bought a 3G phone last August and within couple of days due to a moment of supreme clumsiness, lost my phone over a balcony. Both AT&T and Apple told me “sorry, can’t help you” which I understood since I was the one that dropped it. The problem is that now I can’t upgrade my first generation phone for anything less than a premium price due the phone I bought then and that they know I can’t use. The AT&T rep I spoke to told me that it should have been replaced at the time… which helps me not one iota now. At the time, I couldn’t afford to shell out the money for a second phone and now that I can purchase a reasonably priced version, I’m feeling more than a little frustrated by AT&Ts customer service and deaf ear to loyal users.
17. Messenger | 06.09.09
I heard on the news in fact it was the gaming channell that AT&T wouldnt be able to support all the features available with the new I phone. Apple needs to join the verizon team and give us consumers a choice of wut provider we want to choose. Ive been with verizon since early 2002 and have never had one problem with their service. I like the iphone but not that much!
18. Bob | 06.09.09
They should just add another 2 years to whatever is remaining on the contract and give it to us for the $299..
19. paula bellucci | 06.10.09
I’m so dissatisfied with AT&T. How dare you treat your loyal customers like this! I always talk the iphone up and encourage people to buy one & I know I have led to several purchases. Now, however, I will save this energy to bash AT&T to people as much as I can. I, as a loyal customer of AT&T, have to pay several hundred dollars more for an iphone than new customers!!!!! You must be freakin crazy. All I can say is you suck!!! If ever the Iphone is also available through other carriers I will immediatly cancel my contract with AT&T!!
20. paula bellucci | 06.10.09
I’m so dissatisfied with AT&T. How dare you treat your loyal customers like this! I always talk the iphone up and encourage people to buy one & I know I have led to several purchases. Now, however, I will save this energy to bash AT&T to people as much as I can. I, as a loyal customer of AT&T, have to pay several hundred dollars more for an iphone than new customers!!!!! You must be freakin crazy. All I can say is you suck!!! If ever the Iphone is also available through other carriers I will immediatly cancel my contract with AT&T!!
21. Yashar | 06.10.09
I just ordered two iPhones. I qualified for lower price (199) because my wife and I bought ours in 2007 June 29. Anyways, total price $398, receipt says same. Bank charge 502.82. When I asked ATT, they said tax. TAX!!? 25%? No they said, Retail Price Tax! WTF! Mad as hell, filing complaint immediately!
22. TRans | 06.14.09
I am upset because it is cheaper for me to cancel my service with ATT and restart service at the discounted phone price than it is for me to purchase the new 3Gs under my current contract! This makes no sense at all….come on!!!
Trackbacks/Pingbacks
Leave a Comment
We do not publish all comments, and we do not publish comments immediately. The comments feature is a forum to discuss the ideas in our stories. Constructive debate - even pointed disagreement - is welcome, but personal attacks on other commenters are not, and will not be published.
Tip: Do not write a novel. Keep it short. We will not publish lengthy comments. Come up with your own statements. This is not a place to cut and paste an email you received. If we recognize it as such, we won't post it.
Please do not post any comments that are commercial in nature or that violate copyrights.
Finally, we will not publish any comments that we regard as obscene, defamatory, or intended to incite violence.
1. attorneygirl | 06.08.09
Apple and AT&T have made a BIG mistake.
Charging existing loyal Apple iPhone users $699 to get the new 32 GB 3GS iPhone is highway robbery.
I will sell my 16 GB 3G Apple iPhone on ebay, pocket the money, and walk from my AT&T contract.
Screw that company. I don’t want to give them another dime.
Apple is making another HUGE mistake.
Penalizing loyal customers. And I’m an Apple stockholder.
You want to piss off an Apple stockholder? Go ahead. I’ll stop spending and investing.