With Apples announcement of the iPhone 3GS, lots of AT&T customers that had upgraded from the original iPhone to the iPhone 3G last July were anxiously awaiting the pricing to be announced from AT&T.
Now, before I get into what happened after that, lets go into a little history of the iPhone.
The iPhone was initially released in June 29, 2007 and was initially priced at $499/$599 for the 4GB and 8GB versions. This also came with a forced data plan and 2 year contract with NO subsidy assistance from AT&T.
On September 5th of the same year, Apple dropped prices. The 4GB version was discontinued and the 8GB was dropped to $199 ( with 2 year contract, the rest being subsidized by AT&T ). Those that had purchased the iPhone in the previous 2 weeks were protected by a price protection clause that AT&T and Apple both had and could be refunded the difference. The other customers put up quite a fuss. On September 6th Steve Jobs ( Apple CEO ) announced that any iPhone customers that were not eligible for some other form of compensation, would be eligible for a $100 Apple credit.
The iPhone 3G was released on July 11, 2008. AT&T continued thier subsidy plan. With the release of the 3G, AT&T decided to do something rather unique in the cellphone industry. They allowed users that had purchased their original iPhone on or after May 27, 2008 to exchange it for an iPhone 3G. Those that had purchased their iPhone BEFORE May 27th, were allowed to upgrade for the subsidized price and with a contract extension. ( source )
This was a very rare move for a cellphone company. Normally, until you are near or out of your contract period, if you want to want to upgrade your handset, you have to pay the unsubsidized price ( simiar to prices that the iPhone was when it was first released ). AT&T never said that this would be common practice and anyone that’s been paying for higher end phones for the last few years, should understand this was likely a very rare occurrence.
As mentioned last week, Apple announced the iPhone 3GS. After it’s announcement, users excitedly went to the AT&T and Apple sites to see what it would cost them to upgrade their iPhone 3G from last year to the iPhone 3GS. To the shock of many users they were NOT eligible for the new user price. If they wished to upgrade they would be asked to pay $399 for the 16GB version and $499 for the 32GB version. Those wishing not to add an additional 2 year to their contract would be asked to pay $599/$699 ( source ).
Not surprisingly, iPhone users are upset, as many of them expected to be able to pay the $200 or $300 to upgrade like they did approximately 1 year ago. Since last weeks announcement forums have been flooded with disgruntled users and many different sites have written about the customer dissention. There is even a twitten petition called twitition of uses “signing” asking AT&T to offer the subsidized price to them. Some analysts are calling this a “crisis”, as was mentioned at ComputerWorld.com.
Now, while I understand that a larger price tag, especially in this economy, is not something that anyone appreciates, but users have to realize that 1 year ago they signed a 2 year contract extention. They also were able to the their iPhone price discounted because AT&T was paying part of that pricetag to Apple. For AT&T to make up the price, they assume the customer will fulfill their 2 year contract or pay an early termination fee of $175 to get out of the contract. While I sympathize with users wanting to upgrade to the lastest version, they really don’t have a leg to stand on. They signed a two year contract and need to fulfill their end of the contract, since AT&T fulfilled their end by providing a less expesnive phone.
Users that upgraded to the iPhone 3G should wait until next year. Next year there will undoubtedly be yet another iPhone released ( possibly with an OLED screen? ) and your contracts will be over and you’ll be eligible for the new customer pricing. I know our society now feels like they are entitled to everything they want when they want and how they want it, but at some point we have to grow up and comply with the responsibilities that signed up for.