iPhone Subsidy Rules Upset Existing Customers

iPhone 3G S

Apple has unveiled the new model iPhone, the 3G S, while announcing that the price of the standard 3G model will be dropped to $99. But for most current owners, upgrading to the new model will be an expensive proposition.

There are no major shocks in the specifications and features of the new model: as expected it will have a more-powerful camera which now includes video recording, editing facilities for pictures and videos, voice control, and extended battery life. Added security measures include data encryption and the ability to remotely wipe a stolen phone, but be able to restore the data if and when users get the handset back. There are also promises that applications will load much quicker and that battery life is greatly extended.

However, some other key features in the new model won’t be available immediately. The big one – faster connections – will be rolled out gradually as the new HSDPA network takes shape. Multimedia messaging is also currently on hold, while tethering (connecting a laptop to the web via the iPhone) won’t be available until Apple figures out a pricing scheme.

With the original 8GB 3G phone no longer the latest model, its price is halving to $99, no doubt with the hopes of attracting buyers put off by the original price. However, buyers will continue to be required to sign up to an AT&T contract.

There’s also likely to be anger over the news that the $199 (16GB) / $299 (32GB) pricing will only be available to new buyers, or those approaching the end of their service contract. Other existing iPhone users will have to pay an extra $200 for either model – a rule Apple can enforce because of the need to tie the phone to an AT&T contract.

Both sides of the debate believe they are in the right. Buyers feel aggrieved that, in their mind, they are being penalized for their loyalty as existing customers. Apple would likely argue that the iPhone is sold at a deep discount to get customers onto the AT&T contract and that everyone is treated equally by only ever getting the full discount once.

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6 Responses to iPhone Subsidy Rules Upset Existing Customers

  1. It's no surprise to anyone that AT&T can and will twist reality to fit its perception. They are a greedy corporate giant out to make as much money as possible. If you, as a customer, happen to derive a benefit which either pleases you, or one which you are resigned to believe is the best deal that you can get, then, both sides are happy. AT&T really couldn't care less as long as the revenue continues to roll in.

    The 'answer,' of course, is simply not to 'make do,' or to accept less than what you feel is fair and equitable. Vote with your dollars; with your feet. Until and unless Apple & AT&T do right by you as a customer, don't buy their product. Take your money somewhere else. Blog about it if you have to. Get the word out to your friends and associates, in order to inform them, and affect their choices if possible as well. Until you hit a company in its pocket, it's all idle talk. A company will continue on their current course until it affects the bottom line enough that they are *forced* to pay attention. Even though I'm a 'gadget nut,' I'm not willing to be held up for ransom, or to be ravaged by obvious corporate greed. I'll wait until I see the deal that I want on the table before I give them my money. Everyone has to do what seems right, or fair, to them.

    • On you the best and most insightful comment I've read this week :) Thanks GadgetNut! :)

      Can you believe that me, a guy who runs a gadget/tech/IT blog, only has a pre-paid cell phone? :) It costs me a total of $10 per month… Oh sure, I lust after all those new flashy smart phones, but do I really need one? Not yet.. :)

  2. It’s no surprise to anyone that AT&T can and will twist reality to fit its perception. They are a greedy corporate giant out to make as much money as possible. If you, as a customer, happen to derive a benefit which either pleases you, or one which you are resigned to believe is the best deal that you can get, then, both sides are happy. AT&T really couldn’t care less as long as the revenue continues to roll in.

    The ‘answer,’ of course, is simply not to ‘make do,’ or to accept less than what you feel is fair and equitable. Vote with your dollars; with your feet. Until and unless Apple & AT&T do right by you as a customer, don’t buy their product. Take your money somewhere else. Blog about it if you have to. Get the word out to your friends and associates, in order to inform them, and affect their choices if possible as well. Until you hit a company in its pocket, it’s all idle talk. A company will continue on their current course until it affects the bottom line enough that they are *forced* to pay attention. Even though I’m a ‘gadget nut,’ I’m not willing to be held up for ransom, or to be ravaged by obvious corporate greed. I’ll wait until I see the deal that I want on the table before I give them my money. Everyone has to do what seems right, or fair, to them.

    • On you the best and most insightful comment I’ve read this week :) Thanks GadgetNut! :)

      Can you believe that me, a guy who runs a gadget/tech/IT blog, only has a pre-paid cell phone? :) It costs me a total of $10 per month… Oh sure, I lust after all those new flashy smart phones, but do I really need one? Not yet.. :)

  3. As a person who really does need something like an iPhone, it really made me mad when ATT did this. See my current first gen iPhone is slowly losing it's volume during calls, so I have to replace it. The solution at the genius bar? They have ZERO ability to repair it, so I have no service options. Good job Apple. See ATT doesn't get ALL the blame in my case.

    All this being said, I think I do qualify for the cheaper phone according to buyiphone.apple.com. Small blessings I guess….

  4. As a person who really does need something like an iPhone, it really made me mad when ATT did this. See my current first gen iPhone is slowly losing it’s volume during calls, so I have to replace it. The solution at the genius bar? They have ZERO ability to repair it, so I have no service options. Good job Apple. See ATT doesn’t get ALL the blame in my case.

    All this being said, I think I do qualify for the cheaper phone according to buyiphone.apple.com. Small blessings I guess….

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