iPhone 3G S: World's Best Phone Saddled to World's Worst Carrier

The Life Of Bryan

#1 – 3:11 PM June 8, 2009

Just as soon as that exclusivity agreement ends…

Bill Barth

#2 – 3:50 PM June 8, 2009

I've had my iPhone (2G) for ~18months. I just walked through the process of buying an iPhone, and I'm eligible for the good pricing for a 3GS. I don't know if there's difference between 2G and 3G iPhone owners, but at least some existing customers are qualified for the cheaper prices.

Doomstalk

#3 – 4:03 PM June 8, 2009

In general this seems like a bad deal for developers. Already struggling for attention in a wash of poor quality junk, now they have to contend with a fragmented market. Do you develop for the original iPod Touch/iPhone 3G, or try to stand out by writing something flashier for the iPhone 3G S?

steeef

#4 – 4:20 PM June 8, 2009

Discount, shmiscount. Wake me when they lower the cost of the data plan. I'd pick up an iPhone in a heartbeat if it was less than $50/month.

btb

#5 – 4:24 PM June 8, 2009

This is exactly the same as any other phone on AT&T. You sign a two-year contract, and you get a subsidized phone. After the contract expires, or you pay early termination fee, you are eligible for a new subsidized phone.

There is nothing about having to be a "New customer to AT&T"

Anonymous Anonymous

#6 – 4:59 PM June 8, 2009

You Americans may be worse off than Europeans, but I can guarantee all Canadian carriers are worse still!

Ever increasing rates, ever shrinking minutes, individually-charged texts (MMS costs more of course, *if* it's available) on all but the biggest plans (coming and going -- yes you pay for spam) in addition to all your problems.

gewurztraminer

#7 – 5:42 PM June 8, 2009

I'm a qualified customer, and can upgrade for as little as $199 ($99 if I want an older model). But with no 3G coverage in my area, there is no point. Looks like I"m sticking with my Motorola RAZR.

Lonin

#8 – 6:10 PM June 8, 2009

It's still the monthly fee that kills me. I'm almost certainly going to grab a 3G S next week, but I'll be doubling my monthly bill for essentially exactly the same service on Verizon minus data. The phone itself could be $500 and I'd still be paying far more by the end of the contract for stuff I don't need. A minimum plan of 450 minutes a month is ridiculous as is the jump from 200 to 1500 text messages (not to mention the cost of text messaging to begin with).

Of course, I say all this and I'll still end up giving AT&T my money.

CGI_Joe

#9 – 6:11 PM June 8, 2009

Hey Joel, over at Ars, they contacted AT&T and found out that you can qualify after you've been under contract for 18 months (Which matches up with Bill Barth's experience).

http://arstechnica.com/apple/news/2009/06/att-on-tethering-iphone-3g-s-pre-orders-early-upgrades.ars

But 18 months is still nutty. Why can't I just sign up and extend my contract, like if I had Verizon, or anyone else?

AT&T's complete ball-drop-action was really on being the premiere carrier for the iPhone... who doesn't support the iPhone's features... That is really the main issue I have.

It will be very interesting to see how AT&T spins damage control on this. Will they cave and announce support sooner? Is this some kind of insane tactic to gauge what customers want? Do they want to see what they can get away with before people bail? I don't see a mass exodus or anything, but offending the most vocal faction of your customers is really poor. Even if someone wasn't going to buy an iPhone and they told me they wanted to get a Blackberry on AT&T, I'd tell them to get one from someone else. The iPhone is really the only "pro" in the overflowing column of "cons".

Oddly spotty 3G coverage? Check. No MMS? Check. Charge an arm and a leg for SMS but I can send all the rich, formatted emails I want? Check. Service you normally have at home disappears for no reason and comes back? Check. Completely unhelpful customer service reps burdened by adding SMS to my plan because they aren't selling me a new phone? Check.

Michael Wendell

#10 – 7:06 PM June 8, 2009

This is really ticking me off. My wife and I have a family plan with two 3G iPhones. Mine has a cracked screen and more pixels are going dark every day. I was looking forward to dropping some coin on the new one, but the extra $200 is ridiculous. That's just AT&T bending me over because they can. I'd definitely jump ship if I could.

Alan

#11 – 7:45 PM June 8, 2009

AT&T really isn't doing anything different with the contracts than Sprint was when I was on it. What does get me is that my kids have MMS on their AT&T phones, but I have to wait 'till later this summer for it just because I have an iPhone.

schmod

#12 – 9:14 PM June 8, 2009

Come on now.

Verizon are a much, MUCH worse carrier than AT&T.

Ironically, the best mobile carrier I ever used was on a prepaid phone I picked up at a Tesco in Scotland.

ckd

#13 – 10:58 PM June 8, 2009

BTB (#5): I wish it were like any other AT&T phone; if so, they would unlock it for you after your account has been in good standing for long enough. However, the iPhone seems to be their one exception to that policy, and I don't expect the 3GS to be any different.

nick

#14 – 11:39 PM June 8, 2009

I don't understand all the kvetching about the upgrade price. this is not news in the slightest. It has been AT&T's policy for years (and probably Verizon's as well). You buy into a 2 year service contract and get a reduction on the cost of the hardware. The subsidy is built into the profit on the subscription plan. The original iPhone purchasers were able to get the 3G subsidized because they paid an unsubsidized list price on the hardware. AT&T has also consistently allowed new lock-in 2-year contracts at the 18-month point on the existing contract.

Why should iPhone users be so special as to expect anything different? The whining on this is at a monumental volume across engadget, gizmodo, pick-your-iphone-blog, but it's still over nothing.

As for MMS, tethering, SMS costs, 3G build-out, cry away! I'm right there with you. But, please, stop the whine-fest over this point.

Rick Fletcher

#15 – 11:51 PM June 8, 2009

@#2 The original iPhone wasn't subsidized, so AT&T isn't "losing money" on people who upgrade early like they are with the 3G.

The pricing model here is the same as it's been for any subsidized phone on any carrier, ever. They sell you the phone at a discount because they know they'll get that discount back over the course of your contract. If you break the contract early they lose a bit of money on the months you're skipping out on. Hence the early termination fee, or, in this case, the inflated upgrade price. It's recovery for those lost months.

Granted, the numbers the carriers throw around generally stupid high. (Right. The iPhone would cost $700 retail if it were normal piece of consumer electronics. Ok.) But that's the thinking, anyway.

So why now is this causing a stink when this is the way it's always worked? The iPhone's biggest impact on the mobile phone industry: They're selling a phone that people actually want!

I'm upgrading to the 3GS, but I'm in the same boat as #2. I'm ditching the original iPhone, so no extra upgrade costs. (And all along, hoping Apple doesn't extend their exclusivity with AT&T so I can eventually go somewhere -- anywhere -- else.)

Fatgadget

#16 – 3:14 AM June 9, 2009

It is a similar story in the UK, I got my 3G iPhone on launch day in the UK in 2008, for me to upgrade to the new 32GB version and buy myself out of my O2 contract it is going to cost £520 ($817)(6 months left to run).

I think the sales of the 3GS will be a lot lower than the original 3G, as the majority of people who would buy the 3GS are existing 3G owners.

Mattttt

#17 – 5:24 AM June 9, 2009

Here in Germany, the iPhone is linked to the worst provider (T-Mobile) which flawlessly combines bad service (think AT&T squared) with cluelessness (think Comcast) and the prices of a former monopolist (think British Mail). I won’t get an iPhone until there are more provider options or it can be safely unlocked. Sheesh.

HeatherB

#18 – 5:58 AM June 9, 2009

So what if you still have the 1G?

paanta

#19 – 6:21 AM June 9, 2009

I hope that most developers continue to publish stuff for the touch/2G/3G level of performance, since I can't imagine the 3GS will make up _that_ much of the market. Especially since AT&T is screwing over anyone who wants to upgrade. It's annoying as hell...I'd ditch my 3G phone in a heartbeat if I could get the $300 price on the 3GS.

That said, the 3G is still going to be the 2nd best phone on the planet as of the 19th and the AT&T thing only pisses me off for 5 minutes once a month when I get my bill.

dculberson

#20 – 6:38 AM June 9, 2009

Hopefully the new competition will force AT&T to provide better customer service. I was a Nextel customer from way, way back and when Sprint bought them I was terrified and ready to jump ship. But once people started leaving in droves, Sprint realized they needed to do something to hang on to customers. What's changed in the last couple of years?

They went from a completely abusive policy of "changing your plan extends your contract by one year" to allowing changes with no contract extension. They went from charging existing customers a little more for upgrade phones to charging them less. They set up a "premier" customer program and actually called me and offered me a cheaper, better plan. That was a serious WTF moment.

I'm not saying Sprint is now awesome - they're still spotty coverage wise downtown, they're still a huge organization with a lot of clumsy hurdles to jump for some things. But when you can call and talk to a specific person as your account rep, and she helps walk you through a process? That's amazing. She even answers emails!

So let's hope that AT&T gets there. It'll take a few million customers jumping ship, but it could happen.

codeman38

#21 – 8:55 AM June 9, 2009

I totally agree with #8... cell phone companies really need to recognize that there are people who simply don't talk for 450 minutes a month.

AT&T is particularly ridiculous about this, because there is a data-only plan... however, one has to send in documentation that one has a diagnosed speech or hearing disability in order to be eligible for it. Seriously, would it hurt them to just make it available to everyone, no strings attached? Particularly given that there might be people who sign up who previously didn't because the pricing plans didn't fit their needs at all?

LeSinge

#22 – 2:14 PM June 9, 2009

On the $175 early termination fee being pro-rated: Does this mean with one year left on a two-year contract the fee would be halved? Or is there some hinky math at work? Trying to decide if I want to get the 3G s or wait till next year when they might actually put out a "new" phone.

John | We Have Contact

#23 – 7:11 AM June 10, 2009

I think that's a ridiculous price. I would love to have an I phone, but hate AT&T with a passion.

That being said, can you blame the company for charging such outrageous prices if the armies of lemmings are going to pay it anyway?

Anonymous Anonymous

#24 – 8:19 AM June 10, 2009

It would be nice if AT&T could actually provide me with a 3G signal when they are charging me $30/month for a data plan. And I should be expected not to complain. This is why companies like AT&T get away with false advertising and crappy customer service.

Joe Kurdziel

#25 – 11:18 PM June 15, 2009

You know i wish these bloggers and writers would stop complaining and start acting. at&t benefits from monopoly status. When the customer finally takes charge and requires the government to split the carriers from the phone producers these problems will never change. I will be writing about the iphone 3gs as well as my plan to help restructure the phone provider situation at the examiner.com the Baltimore gadget review. It will be online this week. Please, join me. If you want to allow competition between service providers as well as phone producers we must separate them and establish a single technology standard upon which all phones in the US will operate. This is not a new idea, it was done to land lines many years ago. In order for prices to go down and service to improve, we must act. If you are like me and your cell phone is your only phone, its time to act. My name is Joe Kurdziel, feel free to email me with your comments or a topic of discussion you would like me to cover in my articles at joekurdziel.examiner@gmail.com. Lets change the system and help people save some money and improve their service.

Anonymous Anonymous

#26 – 8:49 AM June 17, 2009

I was happy with Verizon and can't believe how bad AT&T is. I expected more, especially given the sophistication of the Iphone. Do they really believe that Iphone users are going to stay with them when their exclusivity deal ends? AT&T, your expensive phone plans and inability to keep up with technology, let alone set the pace, is one of the many reason why you're going to send Iphoners running to other carriers.....

Anonymous Anonymous

#27 – 1:37 PM June 24, 2009

My husband had the first gen iphone last year when the 3G came out. He upgraded to the 3G phone (no discount back then) and was required to sign a new 2 year contract for the privilege of having it work. I took his old first gen iphone (also originally purchased from Apple at full price)and was required to sign a new two year agreement for that line as well.

How is this legal? I understand signing an agreement if AT&T is subsidizing a new phone, but if you are paying full price for a phone, what leg do they have to stand on?

Anonymous Anonymous

#28 – 4:07 PM June 24, 2009

You do all realize these restrictions are not. AT&T policy...they are the onerous restrictions placed on it by APPLE! The people who have to support the iPhone at AT&T and its support contractors HATE to support it because they are not allowed to blame the real villain...APPLE.

Totally Irritated...

#29 – 3:16 PM July 14, 2009

I am so annoyed. Lost my Iphone. Want a new iphone, the same one I bought LAST year for $400!!! Now, the "new" upgraded version has arrived. One would think(!!) that last years model would be less expensive than it was last year or at least the same price. I got no rebate last year as it wasn't yet time for it to be applied to my new purchase. They want to charge me $200 more for the same darned phone!Really?! I bought myself and my husband the same phone last year and have been paying heavily for the service every month since then. My choice, I get it...but, what about loyalty? Trying to weasel another $200 out of me for the outdated model of last year? I simply do not get it. I am trying to figure out how I can pay the cancellation fee and reopen the acct and save myself $200.

Sorry, Livid in Riverside.

WallDudeOfLog

#30 – 11:49 PM July 21, 2009

iPhone the best phone? Ummmm, what have you been smoking? It's an overpriced piece of shit that is trendy and has 9283267398 apps made by idiots trying to get rich off of iTunes that mostly are pointless, novelty apps. It's only just now getting features most phones have had for years, and yet people are praising it. Are they blind? Dumb? Both? Seriously. Fuck the iPhone. I'll take a Nokia. Hell, I'd take a stupid Palm Pre over the 3GS.