Apple announced at the WWDC 2009 Keynote address yesterday that their third generation iPhone, iPhone 3G S will be available on June 19.
As expected they didn’t change the price of their new, faster iPhone. $199 for the 16GB model and $299 for the 32GB model for "new and qualifying customers".
However, if you are an existing iPhone 3G user then you will have to pay a premium over the subsidized pricing to upgrade, which doesn’t seem to have gone too well with them based on comments from some of our readers who are already ticked off as MMS and Tethering available won't be available at the time of launch of iPhone OS 3.0.
So I thought of going through it in details to give you a better perspective of iPhone 3G S pricing and to find out if it is fair.
iPhone 3G users:
There are two things that iPhone 3G users who are planning to upgrade to iPhone 3G S need to worry about. The pricing and the eligibility date.
Here is a breakdown of the three AT&T customer classes and associated iPhone pricing follows:
The pricing for new and qualifying AT&T customers are as follows:
- 16GB iPhone 3G S (black or white) will cost $199.
- 32GB iPhone 3G S (black or white) will cost $299.
The pricing for early upgrade customers (iPhone 3G owners):
- 16GB iPhone 3G S (black or white) will cost $399.00.
- 32GB iPhone 3G S (black or white) will cost $499.00.
No-contract, no-commit pricing (same for non-qualifying customers):
- 16GB iPhone 3G S (black or white) will cost $599.00.
- 32GB iPhone 3G S (black or white) will cost $699.00.
Existing iPhone 3G users are complaining that they can’t avail of the subsidized rates that is available to new customers.
The reason for paying a premium is because they had already got the subsidized rates when they bought iPhone 3G, which is essentially given by AT&T for signing a two-year contract.
It’s clear from the no-contract, no commit-pricing that AT&T attaches a $200 premium for each year of the contract, which amounts to $400 over the two-year contract.
This is where the eligibility date comes in if you check for early upgrade pricing at Apple's website at http://buyiphone.apple.com.
For example: If you had bought an iPhone 3G at the time of launch last year, which was July 11th then you will be eligible to upgrade to iPhone 3G S on 11th July and the pricing that you should see is as follows:
- 16GB iPhone 3G S (black or white) will cost $399.00.
- 32GB iPhone 3G S (black or white) will cost $499.00.
As you would have used your iPhone 3G for one year and hence compensated AT&T for a year’s subsidy which is $200, but you still need to pay $200 to cover for the subsidy of your iPhone 3G for the remaining one more year of your two-year contract.
AT&T will also charge $18 upgrade fee. I’m not sure why AT&T charges this fee.
If you are thinking of paying an early termination fee of $175 to get around this, please be careful as this could put you in the non-qualified customers category where you will have to pay $599 (16GB), or $699 (32GB) for a new two-year agreement.
Original iPhone users:
Original iPhone or first generation iPhone owners should be able to avail of the same rates as new customers as they didn’t get the additional $200 subsidy which was introduced with iPhone 3G. But I’m guessing they will have to pay revised monthly rates available with iPhone 3G S.
Is the early upgrade pricing for iPhone 3G fair?
This is how subsidy works so some might say it is unreasonable for iPhone 3G users to expect AT&T to offer them prices offered to new customer without completing their two-year contract. If they want the new pricing the only option iPhone 3G user should complete the two-year contract.
I tend to agree but AT&T could have at least offered a $50 or $100 discount as a loyalty reward for its existing iPhone 3G users as an incentive to renew the contract for two more years.
I might have not covered all scenarios so please feel free to drop us a line and we or our great readers will try our best to answer them.
Based on the above pricing, it will be interesting to see how many of you are planning to upgrade to iPhone 3G S, so please let us know in the comment section below.
yes, its without contract!
Which bit of subsidised do people not understand? The higher price for existing users is to pay for the iPhone you've already got but haven't fully paid for.
i think the pricing is fair, ppl have outstanding commitments to the networks which they signed when the iPhone 3G came out. Reason why the networks let you terminate from the 2G iPhone is because consumers bought them at unsubsidised costs, another words consumers paid the same costs for the iphone that the company bought the iPhones for!
When the 3G was made available the companies placed the iPhone 3G on 18 month or 2 year contracts and existing iphone customers could upgrade as the company had no costs through subsidising on iPhone 2G. Over the contract period they will re-coup the money they subsidised from the 3G.
What people are asking for is for the networks to make massive losses in money to give them a new phone that they cannot wait 6 to 12 months for!! When at the same time they are offering you a way out early which will basically cover the costs. All iPhone customers should count themselves lucky, if you had a nokia or a sony ericsson or another handset this option wouldnt even be offered!
I've been an att/cingular customer for 20 or so years. As soon as verizon gets the iphone, I'll be switching. I'm tired of att's bs over the iphone. It shouldn't be any different than any other phone. Why do we have to pay more for a plan? Other att phones have just as much capability. Why can't they support mms? Every other att phone has mms capability! I think it's ridiculous, and I won't pay a premium to upgrade! I'll wait till I can drop att and switch! Thanks att!!!!!
Is it locked to same Carrier only, or factory unlocked?
in the UK the plans are the same as other phones but you pay more for your handset, so the choice is upto you, in fact going of O2's latest pricing around handsets iPhone is currently one of the cheapest on their contracts, alot of nokia's, blackberrys, sony's, and samsungs are more expensive!
faster ram and processer would be great but I love my iPhone now and canlive with it for one more year. Maybe by then the new iPhone for 2010 will me with a better phone company and I can just switch carriers. Just imagine how much plan prices would drop if ATT and verizion both sold the iPhone. I am mad however that ATT wasn't on the list for tethering and we won't get mms till later this summer if it even happens. Also I can't wait to see all of the new jailbroken apps for this firmware. I'm sure that although apple has made some great changes we will also see some great things comming from the deb repos in cydia.
Going back to pricing I think havin the $99 iPhone 3g was a great move and tyt alone willdraw in more customers towards apple and there many great products.
It doesn't matter a whole lot to me because I still have a 1st gen iphone, so I am looking forward to getting the 3GS 32GB for only $299. Its a nice upgrade for us 1st gen users.
was gonna buy one but not at those prices. There's the 1G, 2G and the 3Gs.
How many Gs will it cost to run the iphone in the economy?
If I were you I would consider taking some English classes or at least spell the hole words, it would make it easier to read if you got something to say. Thank you
I live in India and bought my iPhone 3G 16GB here which is priced at $900. Spare a thought about me..
The first iPhone was not subsidized, so any one who purchased it, contract or not, paid the same amount through at&t or Apple. Also, if you had purchased the original iPhone you automatically qualified for the fully discounted price for the iPhone 3G because at&t never discounted a phone for you when you bought the original iPhone. It sounds like you where given incorrect info and overpaid for your 3G iPhone.
Now with the 3GS you will have to pay $200 more than a new cust or a cust who has completed enough of their contract to get the full discount, BUT by signing a new contract at&t is STILL giving you a $200 dollar discount over any cust who wants to buy the new 3GS without a contract. The reason for this is that with a new 2 year contract on the 3GS at&t will forgive the rest of your old contract, up to 18 months worth (It has to be at least 6 months since your last upgrade before at&t will even let you get the $200 discount)
To me this discount structure seams to be completely fair. These devices are powerful little mini computers that are worth the $600 bucks with no contract so for at&t to fork out $400 bucks on your behalf in exchange for a 2 year contract or $200 for a six month to 18 month contract seems awfully generous especially compared to the discounts that any other carrier gives on any other phone.
Everyone is looking for a free ride. This article explains the situation great. I am an original iPhone owner and the phone has been reliable for me for 2 years now, I love it. I have pre-ordered the 3G S and they are making me pay the $30 data plan instead of the $20 original one but I think a 2-year lifespan of a phone is a good model. Existing 3G users will get 90% of the new phone's functionality with a FREE update. I would hang tight, wait until your contract gets to 18 months and often AT&T will allow you an early discounted upgrade to keep you as a client. It's a fair situation.
Maybe it's time to give the Palm Pre a try. Besides, Sprint's data network is quite a bit faster than AT&T's.
I have a data card from Sprint and the Internet connectivity is quite fast almost anywhere I've tried it.
I have never seen so many cry babies in my life!! Seriously, the pricing is fair. It's the same shit any other phone company would give you. I came to att upset to leave t-mobile, but after 9 months I realize there has been no difference in service, pricing, or anything. I got my discount full on my 3g iPhone. Why should I get another full discount so soon?! It's my fault (as it is yours) that a 3g was purchased out of want rather than waiting for the new "next gen" phone. AT&T has been fine. And "fuck apple"!?!? Please grow up for a moment and realize that without apple, we'd still be pissed that our flip phone keeps breaking or our blackberry has a memory leak and keeps wiping the phone out. Shut up and pay up. Or please, go to verizon and move on. Thank you iPhone hacks, AT&T, and APPLE! Man.
I have to say that a portion of your comment I don't agree with. The pricing is not "fair"! You are right in terms of the iPhone 2G. But when it comes down to the situation arising from the pricing of the 3Gs for existing customers, it's really shows a lack of commitment! I understand that they are a company and that they have to seek their own interest but that's no reason to basically overprice the phone. We all understand that these are arguably the most advanced mobile devices in existence.
In essence, it comes down to seeking the best interest of the customer. Last year, when the 3G was announced, they were able to price it as they did because of the cost per unit. it cost less than $153 to produce each unit, but they sold the for $199 for an 8G and $299 for a 16G. Which goes to show that they are more than capable of providing the phones at a more reasonable price. Apple and AT&T are both making a killing on the iPhone and the plans/existing contracts respectively. My average phone bill is 180$ for two lines with iPhone 3G. It's $30 per line for the Data Plan, $30 for the messaging plan. That's $90 before even counting your voice plan. I believe that there is something both Apple and AT&T can do for their existing customers/iPhone users to upgrade to the new iPhone without paying between $399 to $699 to get the phone. Not to mention you still have to sign a new two year contract on top of paying that price!
I think the new iphone is expensive
compared to the iphone 3G and i am not getting it. Plus i am locked in an 18 month contract with the iphone 3G. when apple annouced the iphone 3G (not 3GS), They releases two model a low end 8GB and top end 16GB, The 8gb was free on a £45 contract 18 month with O2 (UK) and the top end 16gb model was £60. Now with the iphone 3GS again there are two models but now the low end 16gb model cost £87 more than the current 16gb 3G model and the top end model costs £175 on the same £45, 18 month contract with O2.
It'd be nice if AT&T or Apple EVER rewarded customers for their loyalty, but they don't. AT&T has their customers by the short hairs with a contract and Apple has anyone using their products by the BALLS! Maybe someday they will realize that they're not really all that they think they are when people start refusing to use their overpriced products and services. Until then though, if you want the 3GS, lube up and get ready to take it!
I will be keeping my 3G as long as I can, hopefully moving to another service (and a newer smartphone?) when my AT&T contract expires.
wish people would stop complaining about how expensive the iphone is!! you dont need to buy it!!
and of course the networks and apple know they have you by the balls! they both have a product which they know people will pay through their noses for. its only natural at the end of the day, they will milk it for as much as it is worth, you may not like it but well done to them!! Its not the networks fault neither, any company would do the same thing, doesnt matter which provider you choose.
at the end of the day if it was your product you would only react the same and you would make as much money out of it as you possibly could!
Im not a massive apple fan myself and I wont be buying the 3GS as my iphone 3G is perfectly fine. Nobody moans that nokia or anyone else brings out new phones all the time so why is everyone moaning about the iphone!
Why not a trade in program, offer the $399 price for existing 3G users, but then offer $100 trade in discount on top of that?
The 3G can be unlocked, I am guessing that the 3Gs can't be unlocked (they may have even taken hardware steps to prevent jailbreaking for all we know at this point), given that Apple doesn't like jailbreaking and AT&T sure doesn't like unlocking phones, giving an incentive to trade in the existing phones that can be unlocked and jailbroken makes a lot of sense for both Apple and AT&T.
I am just saying that, it will let me pay the $399/$499 right now and i have not even reached that eligibility date yet. Then it goes on to say that I will be eligible for a full discount on the eligibility date. So the full discount on 8/25 is 199/299. If you are right, then att should be held responsible for false advertisement as far as i'm concerned, because if i'm going to upgrade, and will have to pay the 399/499 price whether it be now or august 25th, i'd rather pay now. So if i wait til then because according to their wording, i would get the full discount, and then i don't recieve it, i would be pissed, because that means i would have waited 2 months longer than i wanted to, to upgrade, which wouldn't have happened had they not falsely advertised what the price is.
I bought iPhone 3G 2 days after it came out (July 13th 2008) and when I check the price at http://buyiphone.apple.com it says: "$599 — 16GB iPhone 3GS and $699 — 32GB iPhone 3GS." and "We can offer you an iPhone at the full retail price. On 12/14/2009, you may qualify for a standard iPhone upgrade" Anybody understand why?
this is exactly what it says
"iPhone Upgrade
As a valued AT&T customer, we can offer you a discounted iPhone upgrade at a higher price, along with a 2-year commitment and an $18 upgrade fee. Please proceed with the online upgrade process for pricing details. You may qualify for a full discount on a standard iPhone upgrade on 08/25/2009 "
That right there means to me that i will be able to upgrade for the 199/299 price on 8/25
yeh, it's mad isn't it. My price was based on the 18 month contract and that's even more. How many people will, like me, not buy out of their contract and in 6 months time when it ends just wait for the next new iphone (iPhone 4?)
Surely very few people apart from new customers, will be buying this… O2 may lose out big time.
Nothing makes me happier than when someone complaining about another person's grammar misspells words.
I have never seen so much crying in my life! You signed a 2 year contract when you got you 3G Iphone, did you not read it. Go a head and switch carriers its the same with all of them. I was with Verizon before I got the first Iphone and it was the same thing, I had to wait before upgrading to a new phone (18 months) same as AT&T. My wife's phone is still with Verizon and I can not get her a new phone till August, they are all subsidized, no matter what carrier you go to, Its been that way for 20 years. Quit wining and either pay to upgrade now or wait like everybody else does on every network in the US. It the same with companies like Dish or Direct TV. I was with Direct TV for 6 years and wanted to upgrade to a new HD Receiver and they wanted to charge me something like 200.00 (It was still cheaper then buying a new one). But since my contract had been up I switched to Dish network and got all new Equipment (Again I had to sign a 2 year agreement), but 6 months after I switched got a new HD TV to replace a old TV and it would cost me full price for a replacement receiver, I would have to wait 1 year from my original contract date to get a better price on a new receiver which I did. You all need to get a life and learn to read before you buy. Just because Apple come out with a new phone doe's not mean you get the new customer pricing. My wife phone is a Moto, just because they came out with a new model 3 months later does not mean I can go to Verizon and get the new model at the subsidized price. If AT&T did it with the Iphone they would have to do it with every phone. When I first started using cell phones, back in the old days when it mounted in your car you paid full price (and it wasn't cheap), and you could switch phone every day if you wanted to, but pay full price for a new one Phone were not subsidized back then. So you can switch now every day if you want, you just have to pay full price. Its all really simple (its just a phone I do not make love to it).
T-Mobile has posted some technical specs which has revealed the details you
were looking for:
http://www.iphonehacks.com/2009/06/iphone-3g-s-specs-reveals-faster-600-mhz-processor-and-256mb-ram.html
Get real Dave, there obviously is some incentive for this response. Who takes that much time to write a response in a blog. Get a real job. Your company stocks will go down as soon as Apple pulls out. Apple has done a good job of keeping your flaws out of the spotlight, but this time around your company's blunders (MMS and tethering) were made apparent. Looks like Apple is changing gears (Verizon?). F-you AT&T, and uverse sucks too… I just switched back to comcast.
u can b serious, u took the tyme ta read that and even more ta try and write a snappy response, get a lyfe man, this isn't a college term paper. It's an online blog. Dnt b gay it's knot attractive.
Screw that price, at&t and apple, I left them all. A bunch of money grubbing fools..No customer loylty for us.
HA! I was thinking the same thing man
all i have to say is: this is bad marketing….the 3gs isnt going to bring new customers….
Ask anyone who hasn't bought an iphone already are they excited about this phone….ask them them do they even know what the 3gs is. when i explain to people who dont already own an iphone the difference between a 3g and 3gs they say something like, "so basicailly im paying for a camera?", or "wait, you couldn't record video? i can do that with my current $50 dollar phone." The average joe isn't going to want this device. the people who wanted an iphone have pretty much already have gotten it. the only people raving about this product are people who already have iphones or had them. they have made a grave mistake….
Ok here's my plan: what if I add a new line through my wife's at&t account and get a new iphone 32gb with a new 2 year contract, say i get it for $299, then after a month, I cancel the contract. So im going to pay $175 ETF, plus around $115 for first month's service including activation and taxes and fess. So in total i payed around $600 instead of paying a no-commit no-contract price of $699. Will this work?
i dont think it will vincent I think people tried to do this with the 3g one and apple wanted the phone back but I never actually tried it so dont take my word for it
Are you people MAD, you still get to keep and sell ur original 3g. The real problem is 2year contract.
WE NEED TO WRITE AND EMAIL APPLE DAILY UNTIL THEY BREAK SO THOSE THAT OWNS AN IPHONE ALREADY CAN UPGRADE WITH A LOWER PRICING/!!
We all bitch about how to go around these cheaper 3G S Iphone when we can rally up and start writing and boycott the Iphone and make Apple & everyone who wants one to voice their concern that they will leave and cancel their services unless a new pricing for these new Iphone can benefit current AT&T subscribers.Let's do it starting now…write to Steve Jobs & Apple…let's make the site crash!!
they wont do anything if its cracked. that's not covered in the warranty. and if another problem occurs while its cracked they wont fix it. they will say its because of the crack, or the crack voids the warranty. even if you have pointless applecare.
this has nothing to do with att…..
On the difference to the price difference of the manufacturing cost vs the MSRP, blame the manufacturer. If Apple didn't charge 599 for the phone then the 200 that is subsidized normally on the early upgrade is much less of a hassle. To keep it in perspective, the largest non-iPhone subsidy in comparison to retail pricing is the Bold with $250 for qualifying customers. Looking at that, $200 doesn't seem too bad now does it?
You make a fabulous point. AT&T here in the US does not stack contracts unlike many other phone companies. This is why it has the additional subsidy model. Yes, it's not always fair, but look above for the consequences. It's unfortunately give and take.
I think features like faster processor and more RAM are underrated. It might not seem to be good enough but I believe it will greatly improve user experience.
If you keep your features and current revenue as it is, you'll have the standard upgrade as of 8/25. Elsewise you'll have to pay the exception pricing. That's about it.
on the contrary. Regular iPhones (even in scuffed up condition) that work well still go for around $300+ on ebay and 3G phones that are or can be unlocked (software or otherwise) go for $500+. As long as your phone is in working condition and you have the accessories with it, you'll make your money back for the phone and then some, no matter what you have to pay for the phone.
Geez. Let me break it down into simple speak for you….
Original to 3G: "Since you paid $600 for your previous phone, we're pre-approving you for the full subsidy this time around, whereas if you had a non-iPhone (2G) you would have to pay the exception pricing."
3G to 3G S "I'm sorry, since we subsidized your phone last time, we will not be able to give you the full discount at this time, however, we can give you part of one."
There… clear now?
Sheesh.
I've had the original iPhone since Feb. I can answer that one easily. I've used from 4-5 GB (not MB, but GB) since then (not including wifi). This in conjunction with 95% of all of the applications on the iPhone using data (sucks when you're in a non-coverage area like my in-laws, you can't do much but use it as an ipod) you would pay much more than the $20 or $30 per month (20 2G, 30 3G) in data charges. The first time around it was a joint requirement from Apple and ATT due to apple having profit sharing on the feature and wanting all, features to be used on the phone. The second time around, it's all ATT, but it's the same difference… and for perspective, 4GB equals 41943.04 at PPU rate. 4*1024(MB in 1GB)*1024 (KB in MB)*.01.
Last comment for me and I'm done.
For ALL of those who are complaining about contracts…..
If you're so unhappy about it, buy all your phones at non-commitment pricing and see how quickly you have any money to use on your service. The subsidy model was made to make the increasingly expensive and spiffy technology affordable. As I mentioned above for the markup, don't blame the subsidizer, blame the one charging the original price. The company that is providing your service can only subsidize the phone by so much before they don't make anything. On an average low end phone (non-commitment between $150 and $200, free after 2 yr) the average cell company spends at least $350 before you walk out the door. That includes from the acquiring of the phone to the phone subsidy and even the time you spend with the representative there in the store. Does that shed a bit more light on things? The telecom companies NEVER make money on the phone equipment, so they have to make it back on the contract length or the ETF itself (not preferable, but it's there as a safety valve). So for those who have been whining, Get Over It!
Thank you for your time.
Sorry. The only actual new feature the 3gS seems to offer is a digital compass. I'm not paying $400 for a digital compass and a little speed boost. No front-facing camera was a real deal-breaker for me. I already have video capture on my hacked iPhone.
Common, Apple. You're not going to attract anywhere near as many upgraders by simply making some tweaks here and there as opposed to actually adding new features. This is exactly why you're selling Snow Leopard for $30 rather than $130.
Before you slam someone for the way they post or choose to format thier post…
Before you tell someone they need to take ennglish classes…..
Before you tell them anything about spelling ….
Make sure you know how to spell …
Did you really want them to spell hole words or WHOLE words?
If you really meant hole words … could you explain to me what a hole word is? ummm pit, crater, and chasm are a few words that could be hole words …. but then I could be wrong.