What will the iPhone 3G cost current AT&T customers?


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.



I’m in the same boat as several people here. My current Blackjack broke a couple weeks ago, and I didn’t have insurance, so I’m out a phone. I go to AT&T and they say I have to wait two months for a phone upgrade in order for me to get the Iphone that the $199 price.

They basically told me that I’m screwed and won’t work with me on this. I either have to buy a new cheapo nokia phone from them as a temporary phone, or be without for the next two months.

Maybe I’ll be looking at T-mobile now, thanks assholes!


I called AT &T today. they told me I’m not available for an upgrade until next year. I currently have the black jack and have been waiting for the new i-phone. Since I’m not available for an upgrade I have to pay full price for a 3g i-phone. This is such a joke and rip off. looks like I’ll be changing carriers.
I’d rather use an i-phone wanna be and break my contract than pay the people that enjoy ripping off thier exighsting customers!! AT&T are just scumbags and so is apple …birds of a feather flock together.


I was told by AT&T that I would qualify for the reduced price even though I am not eligible for an upgrade til October. I contacted Customer Relations after complaining to a customer service rep. I have been with AT&T since 1998 when it was Cingular and Cellular One. I was told an exception would be made in my case because I had an excellent payment history and my loyalty would be rewarded. I was also told that to qualify for the lower price I had to purchase the phone at an AT&T store, not an Apple store. A note was made on my account and the manager of the nearest AT&T store was made aware. I called on July 11 and I was told that AT&T would NOT honor their promise and that NO EXCEPTION would be made to their updated iphone policy. I called the AT&T store manager and he echoed what I was told.

What a crock! I am so pissed. This is the way loyalty is rewarded? I only have 3 months left and they went back against their word. What a bunch of lowlife crooks. I told the manager that I would just get a jailbroken iphone and switch carriers. He replied “Good luck finding any”. Scumbags!

kevin white

I really wish someone would just make a definitive explanation of this, perhaps… AT&T?

It sounds like:

– If you have an iPhone already, you get the subsidized price. If you bought one since May, you get it without a contract extension. Otherwise, you extend your contract. (activating an iPhone extended your contract anyway, didn’t it?)

– If you don’t have an iPhone already, you may have to pay full price for one if you aren’t in the upgrade period.

If they actually charge existing iPhone owners full price, that’s gonna cause a big stink, bigger than the price drop from last year.


Regarding Jake’s comment about 2-year contracts:
Be happy that 1 year is the market standard in the US for the contract tenure.
In many other countries 2 years is the standard – at least if you receive a subsidized phone. However, many mobile phone providers will give you a new subsidized phone (usually not as deeply subsidized) after 12 months if you sign up for an extension (again 2 years from the day you accepted the offer for the new phone). So theoretically you can get 1 phone within 2 years, 2 phones within 3 years, 3 phones within 4 years, and so on.

Rick Huizinga

I used the AT&T upgrade status website for the two iPhones on my account, and here is what I found:
iPhone #1: Available for a subsidized upgrade
iPhone #2: Not available for a subsidized upgrade until 8/17/08

The reason for the difference is that a new line of service was setup when iPhone #1 was purchased. Because there was no subsidized phone purchase associated with the setup of this line of service, it has always been eligible for a subsidized upgrade.

The line of service associated with iPhone #2, on the other hand was started before the purchase of the iPhone and the original phone for this line was a subsidized purchase. As a result, this line of service is not available for a subsidized upgrade until 2 years after the line of service was initially started.


Will I be able to buy a 3G phone at full price and use it with my 2G iPhone SIM? This is the only scenario I will want to get a 3G iPhone.

Kevin C. Tofel

There’s quite a bit of information floating around out there on iPhone pricing, so let me tackle one bit of it. Current iPhone customers should be able to purchase a new iPhone 3G for the same $199 or $299 price, just like any other qualified upgraders. There’s a few reasons that I believe this: one, the iPhone that these folks purchased in the past was NOT subsidized, so AT&T doesn’t need to make back any subsidy on them… there’s none to make up. Two: AT&T is strongly motivated to get people to upgrade to the iPhone 3G from the old model. Why? The old voice and data plan revs are split with Apple, the new voice and data plan revs are retained by AT&T. Add in the fact that these plans are higher and there’s even more incentive.

Current iPhone owners should be able to upgrade to the new handset with the subsidized price although their contract will be extended two more years.


Wow, harsh words from Michael!!!

If what James says is true (there are a few conflicting posts here) then it doesn’t seem that strange to me. After all, surely this is the risk that original iPhone users took when they signed up for a two year contract. That’s a really long time to be locked to one company/phone.

The fact that you have to pay anything up-front for a mobile phone seems pretty ridiculous to me though. Especially after paying so much for the original iPhone. Upgraders must have more money than sense.

Michael Anderson

“That is false advertising at every level”

Then *every* cell phone EVER advertised is false advertising. How often do you see ‘free phone’ ads, or $99 Blackberry’s … or even the $99 Palm Centro. *ALL* are subsidized …

That statement alone either ruins your credibility to comment on these things or makes you the equivalent of a whiny teen.


I ordered the first iPhone through the Applestore on the day of the release. It’s changed my cel phone experience for ever.

Subsidy or not, I will order the next version on our about July 11th. I’d pay $ 500 or even $ 700 for it, no hesitation.

Penny L

Absolutely agree with Pam. No Sling, no deal for this girl either.


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.

Pam T

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


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.

Mike Cane

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!


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.

Mike Cane

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.)



“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?


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.

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