back to article AT&T squeezes wannabe iPhone upgraders

AT&T will charge current US iPhone 3G customers a hefty fee for the privilege of upgrading to an iPhone 3G S before their two-year contracts are up, and American owners of the soon-to-be-second-rate 3G model are none to happy about it. AT&T has announced new pricing for existing iPhone 3Gs, plus rates for the upcoming iPhone …


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  1. Chad H.

    Come on

    If this was a Nokia, or Sony erricson, and people wanted a mid contract free upgrade, we'd laugh at them.

    As an iPhone buyer myself, can someone please tell these idiots to shut up? AT&T, O2, Apple, et al, are not Charities. You made a deal, you live with it. These phones arent really as cheap as you think it is.

  2. Anonymous Coward
    Thumb Down


    Why should Apple do anything? Its O2 and AT&T that are royally screwing everyone. They offer subsidies on pretty much every other handset so why treat this differently? Answer is that they know that some Apple fans will buy regardless of the cost.

    I won't be one of them. I'm quite happy to sign a new contract and pay a small charge to upgrade but screw paying up 6 months of the 18 month contract they made me agree to in the first place.

    Then again they've always done this, new customers are ALWAYS treated better than existing customers plain and simple.

  3. Anonymous Coward
    Thumb Down


    So people who signed a 2-year contract now want to get out of that contract and its AT&T's fault?

  4. Brian


    These people don't seem to understand how contracts work, nor what they are getting into when they buy a subsidized phone in the first place. The whole point is to get you on the hook for the length of the contract, and the phone company slowly makes up the price of the subsidy through the monthly bills. If they let you off early, you've not paid off the previous phone yet.

    Nowhere in the contract does it state that the phone company needs to make sure you can upgrade to a new shiny object every time one comes along. Nowhere does it obligate them to make sure you have the latest and greatest.

    Besides, the 3GS isn't that big of a change from the 3G, and AT&T will usually let you upgrade in 18 months, so these spoiled people will just have to wait until Christmas.

  5. Ian Bradshaw

    You've got an un-needed W

    "... the petition had over 1,700 signatures (Twitnatures?)."

    it's hardly rocket science that an upgrade would be coming before your contract was up. Happens with every phone in every country.

    You pays ya money you makes ya choice.

  6. Anonymous Coward

    Standard Practice

    I'm sorry, this is standard practice for every carrier who subsidies phones. What's the real story?

    These people think that it's a god given right to get a new Jebus phone for free?

  7. Mectron

    Apple and AT&T

    Are both extremly bad company offering subpar product and service at grossly inflated price.

    A nice thing to do will be to simply drop the iPhone, it is a piece of junk anyway and pay the 175$ to get out ot AT&T as soon a possible. There are way better phone at way better price all over the place. Only idiots and simple minded whould want such a bad phone (iphone) at such a grossly inflated price.

  8. Anonymous Coward
    Jobs Halo

    Im sorry iphone owners but you are in no way *special*.

    "a contract is a contract"

    WTF is up with these iphone owners (apart from being apple fanboys).

    I own a nokia, im not expecting O2 to give me a free or even cheap option to upgrade my n96 to an n97! These devices are expensive and this is standard fair in the mobile industry.

    Im sorry iphone owners but you are in no way *special*.

  9. Eddy Ito

    Umm... eBay?

    On to more important questions. Will the second hand iPhones be available on eBay? Is Apple going to continue to be pricks and insist on continuing to lock in used units with @&T? Surely, I would think, that would lower the value of second class^H^H^H^H^H hand iPhones.

  10. Wrenchy


    Where do I start??.....

    If it doesn't run on Google's Android OS, I DON'T WANT IT.

    A contract is a contract guys. You have to finish what you started so in the mean time, SUCK IT UP BUTTERCUP.

    The huge discounts / subsidy's apply when said telco locks you in for said period. The same would apply if you were to lose or break your phone. You have to pay full price for a new one if your contract is not up!

  11. Anonymous Coward

    I concur - whiners

    I am an iPhone 3G owner with a contract, I am not at all surprised at this. Of course all the one-time upgrade fees are dumb and annoying, but if a person doesn't pay the full 2 years worth of contract how can they expect to get another subsidised phone from AT&T? Did no one think that Apple would release a new phone for 2 years?

  12. Thomas Wolf

    AT&T even screws NON iphone customers

    I have 3 lines with AT&T, one of which is an iPhone. I want to make one of the OTHER lines an iPhone as well. Yes, I'm currently under a 2-year contract with AT&T, but the two non-iPhone lines are el-cheapo phones that AT&T may have subsidized, but not by much. Anyway, I went online to see whether I'm eligible for an iphone upgrade at the $199/$299 price points, but, alas, I'm told that I would have to pay $399/$499 - just like those folks wanting to upgrade their heavily subsidized iphones.

    Now, I understand that I signed a 2 year contract and I won't whine about not being able to get the iPhone, but this has got to be pretty bad customer relations: AT&T is going to forgo an *additional* $30/month, guaranteed for another 2 years because they're not willing to give me that iPhone for $199. By pissing me off, they'll also likely lose *all* my business as soon as my 2 year contract is up. So, $150/month lost just because they want to make an extra $200 on that iPhone.

  13. Anonymous Coward
    Thumb Up

    It's funny people call them whiners

    I think this demonstrates the superiority of Apple's customer service. Everyone says iPhone users are whiners. When in actuality they are just have a level of customer service expectations that are in line with how they are treated at Apple. So you could say they are whiners for expecting any other company to do a decent job at taking care of their customers, or you could argue that they represent what all consumers should demand of companies in an effort to increase corporate responsibility. My guess is most people will just whine about iPhone owners being whiners instead of actually addressing the issue that the way most companies treat consumers is deplorable and Apple customers are simply pointing this out.

  14. Simon Wilson


    I think the point people are making is that AT&T are not giving existing customers the option to extend their existing contracts by another two years. Most original iPhone owners have less than a year left, and the phones are rather fragile. If you break your iPhone, all you can do otherwise is get a cheap phone and downgrade your plan to remove data features. AT&T loses monthly income. It would make sense to lock people into longer contracts and keep them on the same plan.

    Of course, people *love* to jump to conclusions and blame the people making the petitions for being whiners...

  15. Marcos Scriven
    Thumb Up

    AT&T *are* treating the iphone differently

    I agree that people should have to pay the subsidy part of their contract to upgrade early.

    HOWEVER, O2 in the UK (& AT&T in the US) are asking for the subsidy PLUS the talk time. If you compare the £20 SIMplicity tariff (i.e. SIM only), which gives you 600 mins talk time, 1200 texts, and unlimited web, to the £35 3Gs iphone tariif, which has the same quotas, you can see that the £15 difference is the subsidy.

    Therefore, if you have, say, 7 months left, you should be paying only 7x£15 = £90 to ‘pay off’ the remainder of the subsidy early.

    To ask you to pay 7x£35 = £245 means they are effectively charging you a further premium of £155 to upgrade early, OVER AND ABOVE the subsidy. Now, if you were wanting to cancel your contract and just go to another carrier, fine. But if you're wanting to BUY yet another phone AND sign another contract to stay with them any longer, how does that make sense?

    And for all those people who say "quit whining, it's the same for all carriers/phones", it's NOT. The penalty/premium, as you can see from the figures I've posted, is FAR more than any potential lost subsidy. For other phones I've had in the past, I've been able to upgrade/change phones within contract at a far closer amount to the actual lost subsidy...

    I am currently not in contract, but I’m still not getting this new iphone, as I’d probably be in the same situation this time next year.

    I’ll stick with my jailbroken 3G and await either sensible pricing from O2, alternative operators selling the iphone, or even going to the palm pre when it comes out.

  16. John Chadwick

    Isn't it a bit much to expect.... @AT&T Non iPhone

    A large corporation to do an individual on-line deal specially for you. If you want to do a deal go to an outlet and see what they will offer.

    The internet model is about offering a "cheaper" deal across the board at a lower cost to the business, without complex discounting models. The internet shopping model is not flexible, not is it particularly transparent, so if you want flexibility go to an outlet, communicate with your fellow human beings, and you might get a better deal than the internet.

    You signed a contract for each phone, if the cheap ones were on a 2 year deal that hasn't expired, then, by DEFAULT it will treat you in the same way as an iPhone customer, because the contracts probably aren't specific to iPhones, it is after all just another F. handset.

  17. Andy Worth

    Tough Titty

    I AM an iphone user and I AM tied into an 18 month contract (with o2) at the moment. However, I wouldn't expect them to do me any favours when it comes to upgrading. I got the phone for "free" so obviously they have to recoup the cost (and make a profit) by me paying a monthly fee for the duration of the contract - as with EVERY PHONE I'VE OWNED! Anyone who expects either of these companies to give them special treatment is a misguided fool.

    To be honest, OS 3.0 brings the features I wanted anyway so I wouldn't bother upgrading to an "S" if any exchange of cash was involved. My girlfriends contract runs out next month and she was after an iphone - although it's essentially £99 extra for video recording (why bother? we have a proper camera for that), voice control (she just tells me to do it for her instead) and internet tethering, which we have no use for at all.

    While I can see that some people might view those features as more useful than I do, and may choose the "S" on a new contract, I can't see any reason why anybody but a real fanboy would bother upgrading from the 3G to the "S".

  18. James Robertson

    tethering ?

    I have no problem with the upgrade charge, I do have a problem with the tethering charges, they are out of order frankly.

  19. D@v3

    I for one.....

    am going to wait till next June/July for the new model iPhone. (we all know its coming)

    I agree with Andy Worth, OS3 is going to include enough changes to keep me happy, and seeing as my "Contract" doesnt expire till January, im not going to expect anyone, (Not Apple, and deffinately not O2) to do me any favours.

    Come 7 months time, who knows whats gonna be on the market, and if nothing tickles my fancy and my i3G is still in good condition, then ill keep using it, on a month by month basis, untill somthing better comes along.

  20. Anonymous Coward

    For those who bought the iPhone 3G last July...

    ... Sell the iPhone 3G on eBay on a 7 day auction starting Friday. Offer it with the option of v2.2.1 jailbroken, or v3.0 locked to O2. Should get at least £300-£350 for it.

    Go and buy the iPhone 3GS 32GB on Pay and Go for £538. Stick your contract SIM Card in it, and hey presto, you have a iPhone 3GS for just £238 or less on just a 6 month remaining contract. After the 6 months, you can go to a cheaper 30 day upgrade tariff of £20 a month for the same minutes/texts (not sure about Data, but I think you can buy an unlimited package).

    I think they even give you £150 cashback if you don't get a new phone at the end of the contract.

    Your then free to get new iPhone next June 2010...

  21. Anonymous Coward
    Anonymous Coward

    Why Complain?

    Use a dictionary - look up the meaning of the word CONTRACT

  22. D@v3
    Thumb Up

    Re: AC 8:48

    Good idea

  23. Colin MacLean


    People who bought the original 2G on contract (non-subsidised) were able to upgrade to a 3G on a new contract (subsidised) AND keep their existing 2G (which they could then sell for a tidy profit).

    Now these people are expecting to be let out of a subsidised contract, given a 3Gs and able to keep their 3G (subsidy not paid off) to sell for personal profit.


    Stop moaning, learn from your mistake in signing a contract and go PAYG next time.

  24. jai


    the point is, O2 forced us into these 18 month subsidised contracts. there was no option to be an early adopter last year without buying into the subsidy contract.

    personally, i'm going to get a PAYG 3GS if i can - that way I can detach the hardware from the mobile phone contract. leaves me free to upgrade to the 2010 iPhone next summer if i wish instead of being bound in another O2 contract until 2011.

    that said - my 18 month contract means i'll have paid 790 quid for my 3G phone (including the subsidised cost)

    so by comparison, the cost of a PAYG phone saves me at least 200 quid in the long run

  25. Nameless Faceless Computer User

    Who would want to upgrade anyway?

    AT&T is simply saving existing 3G customers some money by encouraging them to wait for the iPhone 4G.

  26. Ross Fleming
    Jobs Halo

    Subsidy exaggerated

    What I can't really comprehend is the reasoning behind the pricing of the iPhone vs the iPod Touch. 32GB Touch - £283. PAYG iPhone 3GS 32GB - £538. Does it really cost £250 to put a GSM/3G chip in there? I would argue that at MOST, the difference should be about £20. In manufacturing terms, it's probably bugger all.

    Note I don't think I'm "entitled" to get out of my current O2 contract and get a 3GS without paying through the nose.

    O2 are being rather disingenuous at the moment though. Their current iPhone page gives "upgrade" options to existing iPhone 3G customers - install the firmware next week, implying perhaps that this will magically turn it into a 3GS! :-)

  27. Lionel Baden

    so it would be cheaper

    to cancel your contract pay off the existing phone then start a new contract

    oh wait thats only 10 more expensive !!!

    In a contract that goes 2 years why not offer an early upgrade offer thats not unreasonable

    the prices they seem to be charging are unbeleivable

    hopefully people will now realize they have always been paying way to much for a bit of shiny plastic that doesnt really do much except scroll pages up and down.

    oh yeah and the odd phone call

  28. Richard 102

    My solution

    Can we re-open Gitmo and put AT&T executives there?

    (Alien, because the concepts of competence and customer service are alien to AT&T)

  29. Tonyblue

    They will change Their (I)tune fast, I assure you

    Who is the customer base for IPhones? Those who own them now.

    Who are the most likely to purchase the upgrade? Those who own them now.

    Who can't afford the new prices? Those who own them now.

    Once Apple sees their precious new IPhones languishing in their pretty black boxes, unloved and more importantly, unsold, the policy will change quickly, I assure you. What is important is that current IPhone users do NOT pay these exorbitant prices for new IPhones, but make Apple sweat until they come down in price. I don't want an after the purchase rebate from Steve that can only be used in an Apple store. That trick only works once. I want the same price as a new customer. This has nothing to do with a contract that I signed. All of a sudden we see a much better product on the market than what we originally purchased, only a few months later, not a few years,mind you, from the SAME companies that we purchased the original product. Why shouldn't we be offered the option to upgrade to the better product at a reasonable cost?

  30. Anonymous Coward
    Black Helicopters

    OK, So Apple/ATT/O2 Appease and then What?

    Many of the AT&T customers are saying they would be OK if AT&T simply extend their locking for a further 2 years, putting existing customers moving to iPhone 3GS onto 3 year terms.

    So next year when Apple Finally come up with a 5/8/12MP camera and HSUPA, and the year after when 21Mbps is added, and 2012 the first LTE 1GB version is released, we now have people on 6 year terms. Still OK with this concept?

    Taken to the extreme, Apple fanbois will be bequeathing a lifetimes contract to their kids (if the law has not yet been changed to prevent them from procreating) to feed their upgrade fever. The early upgrade option represents a $200 discount over getting a device without a term commitment (you know, like the one you're already in).

    Perhaps they should take their business model down to the car dealership - lease a 2010 MY car over 2 years and then go back next year and demand that you get a new 2011 just keeping your current monthly payments. Good luck with that!

  31. Jim in NJ
    Paris Hilton

    Stupid Exaggarations, Horrible Article

    Paris could have written a better article. Is this the author's - and the whiners' - first cell phone(s)?

    Phones have fees. Smartphones have more fees. It doesn't matter at all who makes them and who the carrier is.

    Phones are subsidized, quite substantially in many cases. In return for being given $200 off your phone, you promise your carrier you'll stay with them for 2 years. 6 months before the end of the 2 years, they'll give you $200 off another phone.

    In more current news, Americans have landed on the moon.

  32. bui

    HELP > > > 3Gs UPGRADE problem HELP !!!

    Dear everyone out there,

    I'm currently with att for about 2-3 months, and my gfriend is also with att for just 1 month. we both have 3G (not 3Gs) iphones on our account, originally cost $199 n $299 by the time we purchased. As of a few days ago, Apple just released the new 3Gs for $199 n $299 n we (me n my girl friend) planned to upgrade to the new 3Gs. Of course, we can't get the subsidized iphone cost twice since we already got the original 3G at $199 just a few months ago. So what we trying to get is the Early Upgrade Option for $399 n $499.

    I went on on apple website, chose the option "Replace a phone on my account by an iphone," and then input my account information such as phone number on my account, my billing zipcode, the last 4 of my social security number and my email address. the website runs for about 1 minute then the responding message came up as:

    "At this time, this account is not eligible for an iphone upgrade. For more detail, please visit an At&t corporate store or call At&t customer care at 1-800-331-0500!"

    Does anyone have any idea why this is happening to my?

    Every bit of advice is appreciated!


  33. Jim in NJ


    At 2-3 months, you're way too early for an "early upgrade". You'll have to pay full retail, or wait out your contract. My advice to you would be to skip this version and pick up next years at the full upgrade discount when you are eligible (probably 3-4 months after next year's launches).

  34. Anonymous Coward

    Instalment plan phones

    There's no free lunch.

    If you dont understand that here's the how. The phone company hasn't given you a free phone. You have bought a phone by an instalment plan from the phone company. If you want to upgrade you have to pay the old phone and get a new phone with brand new instalment plan.

    I never buy anything by an instalment plan. And especially a subsidiced phone as its an instalment plan by disquise which is even worse.

  35. Steve Hodson

    Pissed off at AT&T margin gouging.

    Ya know's not the terms of the contract I'm pissy's more that AT&T expects to make a huge margin on the hardware and the calling/data plan.

    I'm reasonably convinced that Apple makes more money on an iPhone sale than AT&T does but I don't buy that the iPhone costs that much more than the iPod Touch.....hence they're gouging back their subsidy as well as their margin on the original hardware with the new pricing.

    The unsubsidized pricing of $599/$699 is ludicrous.

  36. Anonymous Coward
    Anonymous Coward

    @Anonymous Coward 08:48

    Are you mad? For £342.50 you can get a brand new iPhone 3G with warranty and unlimited data and wifi for a year on PAYG from O2. Why would anybody spend £350 on a second-user, warranty-less, and data-less, 3G on eBay? Even £300 is a stretch!

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