We’ve all gone gaga over the cheap new US pricing of the iPhone 3G and rightly so.  Given the original price of the iPhone, $199/ $299 is downright cheap and has more than a few contemplating purchasing an iPhone for the first time.  This feeling of […]

Iphone_3g_trioWe’ve all gone gaga over the cheap new US pricing of the iPhone 3G and rightly so.  Given the original price of the iPhone, $199/ $299 is downright cheap and has more than a few contemplating purchasing an iPhone for the first time.  This feeling of euphoria may be misplaced in current AT&T customers if the information that Gizmodo is getting from the carrier proves accurate.  Word has gradually leaked out of AT&T that the cheap iPhone 3G prices that Steve Jobs taunted us with are in fact carrier subsidized prices and that the real price of the iPhone 3G is much higher than that.  AT&T is indicating that they are subsidizing quite a bit of the real price, although they have yet to admit what that might be, to get the pricing down to Jobs’ quoted level.  This doesn’t matter to new iPhone/ AT&T customers but according to the most recent information Gizmodo has obtained from AT&T it should matter to existing customers of the carrier.  They are reporting that AT&T will handle the new iPhone like they handle any other phone which means that if current AT&T customers do not qualify for a low-cost upgrade of their existing phone then they must pay full price for the new iPhone.  This price is not yet known but speculation puts it in the $500+ range for customers who don’t meet the detailed qualifying criteria which seems to mean anyone who hasn’t had their current phone for 21 months or so.  This frankly sucks and while I’ve been forthcoming that at the low quoted price from Jobs I would almost certainly be picking up an iPhone 3G at full price I can guarantee I will not do so.  I suspect that none of the original iPhone customers will be upgrading either at full price.  I wonder how Apple can state that the price of the two iPhone 3G models is $199/ $299 if in fact that is a subsidized price.  That is false advertising at every level and it also leads me to wonder how they are going to sell the phone in their online store if they can’t guarantee the quoted pricing?  Makes you think.

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  1. If this is true…How does Apple plan on selling 10 million phones and gaining market share. I would say most folks are locked into a contract and would not be eligible for the 199299 price.

    I always thought the objective was to get these devices into as many hands as possible and recoup the money from the data plan, itunes store and new sdk apps coming.

  2. http://www.boygeniusreport.com/2008/06/09/iphone-3g-the-details-you-never-wanted-to-know/

    “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).”

    If this email is legit, it sounds like existing 2G iphone users will be okay. Who knows?

  3. ^^ What Taxman said.
    Do I need to sign a new two-year contract with AT&T if I buy a new iPhone 3G? Yes, but the good news is that your old contract gets ripped up.

    AT&T informed us that anyone who bought an iPhone after May 27th will be able to swap out their handset with no additional charges for an iPhone 3G.

  4. I don’t understand the reason for this post. I understood from day one that these prices were AT&T subsidized and that the 32GB one would most likely be at full price. (Maybe I’m confused on the 32GB one, but we’ll see. It’s not — oh my god — 7/11. That’s a nasty anniversary date. Terrorist bombs went off in England on that date.)

  5. Stephen Hill Tuesday, June 17, 2008

    C’mon Mike, a little research goes a long way…
    The London bombings were on 7/7:

  6. I was going to add a couple of those links that others mentioned already. I’m curious, since I have heard for existing iPhone owners, the old contract would be replaced with a new two-year agreement that would start on the date the new iPhone was purchased/activated.

    In fact, the Gizmodo article says, “People who qualify for upgrade status and people who have an original iPhone are free to upgrade at the $199/$299 price set by Apple.” (note: “and people who have an original iPhone” is spelled out). So, it looks like the upgrade-eligible question applies to AT&T customers that are under contract for a non-iPhone device.

    That would make sense. AT&T, after all, offers a subsidy phone as a loss-leader, then makes that money back up (in spades) with the wireless service revenue. In the case of the iPhone owners who are not eligible, I imagine Apple had some pretty strong stipulations for those customers since they’re the leading adopters and are the one who will certainly convince many future/new iPhone users to make the move with the new model.

  7. OUCH! I stand corrected on the date. I really did think it was 7/11, so why would I have looked it up? Thanks for the correction!

  8. I’ll find it very hard to believe if everyone doesn’t receive the subsidized $199/299 price on July 11th, even existing AT&T customers with non-iPhone contracts.

    It doesn’t make business sense to throw a roadblock in front of people that are excited about the new iPhone and are willing to pay a higher price for the new data plan. No other phone is going to generate this amount of interest at AT&T – does any one line up at the AT&T store for the new Win Mobile or BB phone – no.

    Regardless, my upgrade date on my BB 8800 is 8/24/08 – if I have to wait til then to get an iPhone, I guess I’ll wait.

  9. Sorry, not buying it until it can Sling. A girl’s gotta have her priorities.

  10. I agree 100% ChrisR. To me it makes business sense to allow current AT&T customers to purchase the Iphone at the 199299 price.

    AT&T then profits from folks adding data plans and locking in for 2 years from 7/11. It’s a win for Apple as far as market share. I think if Apple wants to recoup from not selling Iphones for 6 weeks they need to make that price point available for everyone regardless of their contract status with AT&T. My 2 cents.

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