New iPhone 3G S backlash over AT&T upgrade cost

The new iPhone 3G S backlash has begun, and iFanbois are astonished by the AT&T cost for an upgrade from their old and tired iPhone 3Gs.

No matter that -- in their drooling haste to upgrade last time -- they signed a two-year contract to get the subsidized pricing.

In IT Blogwatch, Richi Jennings watches some bloggers whine and moan and totally ignore their contractual obligations; while others stand on the sidelines, laughing.

Not to mention Mobiusbiking...

Rik Myslewski speaks of shafted and squeezed fanbois:

New iPhone 3G S backlash over AT&T upgrade cost
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. ... On Apple's buyiphone website, current iPhone owners are greeted first with the cheery announcement ... that "As a valued AT&T customer, AT&T can offer you an early iPhone upgrade with ... an $18 upgrade fee."
The upgrade [costs] $299.00 [to] $499.00. ... Add to that the required $30 per month data plan, the aforementioned $18 upgrade fee, another $18 for a "One-time AT&T Upgrade Fee," plus the over-and-above charges for text messaging, ... and existing AT&T contract holders are facing the withdrawal of a serious chunk of change from their checking accounts.
And then there's the fact that ... it was announced that AT&T wouldn't support the new phone's MMS messaging until "later this summer" and that no mention whatsoever was made of when or if AT&T would support internet tethering.

Ken Mingis isn't a whiner, but he was one of the early bloggers to spot the problem:

The good news is that the new iPhones will be out on June 19. The bad news is that I won't be among those in line to buy one next week. Seems I'd have to pay $200 more than the prices touted at WWDC.
The problem has to do with the subsidized prices AT&T offers on the iPhone; Basically, AT&T doesn't want to subsidize new iPhones as often as I, and probably a lot of users, want to buy them. So be forewarned: If you already have an iPhone 3G, you may have to wait a while before you can buy a new one without coughing up a small fortune.

Daniel Ionescu has a cheaper alternative; but it's not that appealing:

AT&T will charge you around $175 to cancel your current contract and only 90 days later (after losing your phone number) you can sign up again for a new iPhone contract.

Anthony Ha is annoyed and confused (and a bit whiny):

One of the big themes at [WWDC] was pricing. ... Too bad the speech didn’t come with footnotes, because once again, AT&T and Apple are using the pricing plan to annoy existing customers.
A heck of a way to reward loyalty. ... So that amazing new 3G S phone you’re drooling for? It might cost $199. It might cost $399. Or it might cost $599. I wish AT&T and Apple luck in explaining that to customers.

But Harry McCracken has no sympathy whatsoever:

Some folks are irate at this turn of events, arguing that the pricing punishes loyal AT&T customers. Nope. What it does is prevent customers who got a steep discount on an iPhone a year ago in return for signing up for a two-year contract to get an equally steep discount this year for signing up for another two-year contract.

Which strikes me as perfectly reasonable, given that this scenario involves you only being under contract to AT&T for a total of three years. You can still get a discount on a new iPhone–just not one that’s as steep as someone who commits to AT&T for a total of four years. ... You agreed to fulfill a two-year contract with AT&T in return for the discount you got last year. AT&T is willing to renegotiate it and give you a proportionate discount on a 3G in return for another year of commitment.

Explain to me again what’s offensive about that?

Mr. Tangent is more succinct:

No offense to anyone upset at AT&T ... but didn't you sign a contract?

Meanwhile, David Sarno braces for the fanboi flamewar:

Before you try telling that to the owners of the now-outmoded iPhone 3G -- who woke up Monday to find themselves in possession of a 12-month-old relic that is slightly slower than the new version, not to mention lacking its compass and video camera -- make sure to strap on your helmet.

Hey! iFanbois! What's your take?
Get involved: leave a comment.

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Richi Jennings is an independent analyst/consultant, specializing in blogging, email, and spam. A 24 year, cross-functional IT veteran, he is also an analyst at Ferris Research. You can follow him on Twitter or FriendFeed, pretend to be Richi's friend on Facebook, or just use boring old email.

Copyright © 2009 IDG Communications, Inc.

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