AT&T hikes iPhone early upgrade prices

Tells customers still on contract to pay up to $549 for new iPhone 4

AT&T on Monday confirmed that it has bumped up the price of early iPhone upgrades by $50.

The change was first reported last week by the Android Central blog.

Starting Sunday, AT&T customers who have not reached the end of their contract must pay $50 more for an iPhone 3GS or iPhone 4. Like most mobile carriers, AT&T sells smartphones, including the iPhone, at the fully-subsidized price only to new customers, or to existing customers whose contract has expired or has almost expired.

AT&T does not disclose how it calculates subsidized-price eligibility.

The $50 price hike puts the "early upgrade" price of the 8GB iPhone 3GS at $299, the 16GB iPhone 4 at $449 and the 32GB iPhone 4 at $549. Those prices are $250 higher than the subsidized cost.

Upgrade prices for other smartphones, including Android and Windows Phone 7 devices, also climbed $50.

"As mobile devices become more sophisticated, their cost goes up," an AT&T spokesman said in an email when asked why it boosted the early upgrade prices. "This change reflects the increased costs, while still allowing us to offer customers the latest device before they qualify."

Apple does not disclose what it charges carriers for the iPhone.

AT&T did not change the "no commitment" prices for the iPhone, the cost for the device sans a long-term contract, although it boosted those for other smartphones by $50. iPhones without a contract run from $499 (8GB iPhone 3GS) to $699 (32GB iPhone 4).

Verizon, the only other U.S. carrier to sell and support the iPhone, charges $650 for a no-commitment 16GB iPhone 4 and $750 for the 32GB model.

This wasn't the first time that AT&T has tightened early upgrades for the iPhone.

Although the company relaxed eligibility rules for the iPhone 4 last summer, in 2009 it infuriated customers when it split them into two groups, separated in some cases by just weeks remaining on their contracts. One group was allowed to buy the then-new iPhone 3GS at the subsidized price while the other was told to pay $200 more.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, or subscribe to Gregg's RSS feed . His e-mail address is

Copyright © 2011 IDG Communications, Inc.

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