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The new iPhone: I'm waiting until Christmas


iPhone 3G S with priceWhen does it make sense to upgrade to the new iPhone 3GS that Apple (AAPL) unveiled Monday?

That depends when you bought your first one. (This assumes you already own an iPhone; if you're happy with your current phone, you can stop reading here.)

If you are one of the 270,000 customers who bought one of the original iPhones in June 2007, your two year contract with AT&T (T) is about to expire and you can buy a new iPhone starting June 19 at the same subsidized price paid by new customers:

  • 16GB in black or white — $199
  • 32GB in black or white — $299

As opposed to the discount price AT&T is offering "valued customers" who upgrade early:

  • 16GB in black or white — $399
  • 32GB in black or white — $499

Or the full price for existing AT&T customers listed in Apple's fine print:

  • 16GB in black or white — $599
  • 32GB in black or white — $699

If you are one of the nearly 6 million owners of a first generation iPhone still working off your original AT&T contract, the new iPhone is a big enough improvement that you'll probably want to get one as soon as you become qualified for the subsidized price. You can check your eligibility at Apple's website: http://buyiphone.apple.com. You'll be asked for your phone number, zip code, e-mail address and the last four digits of your social security number. If you are not yet eligible, the program will tell you the date when you are.

Eligibility appIf you are one of the 15 million who bought an iPhone 3G after it went on sale in July 2008, the decision process is a little more complicated. The new iPhone is better than the one you own — faster, longer battery life, built-in compass, better camera that can shoot video — but not $400 better. To use high-tech's biggest cliche, it's evolutionary, not revolutionary.

Much has been written about the extra $200 to $400 Apple and AT&T are charging existing customers. TechCrunch's MG Siegler calls the new phone a "sucker's bet" because it locks you into another 2-year contract with AT&T at a time when Verizon and Sprint are rolling out 4G networks that could support the iPhone. Siegler thinks AT&T would be wise to extend its customers an "olive branch" to keep them under the tent:

"Sure, they would have taken a hit, probably a fairly big one, but … it’s really only $200 per customer — AT&T makes that off of me in two months with my bill. And if they do lose the Apple exclusivity, they will effectively be losing $1,200 (one year’s worth of bills) that I otherwise would have been paying them.

"Instead, basically what it sounds like to most current iPhone owners is AT&T saying that, 'we love you as a customer so much that we’re going to make you pay an extra $200 for this new device since you stuck around with us.' "

I was among the 1 million people who bought an iPhone 3G the first weekend it went on sale. My two year contract has another 14 months to go. But when I run my numbers through Apple's eligibility app, I find I can get the new-customer price six months before my contract expires. On Dec. 12, 2009, to be precise.

Which is why I'm waiting until Christmas.

See also:

I'm surprised by everyone's knocking the ATT network. Maybe I'm lucky, but I have an ancient RAZR (says Cingular on the back) personal phone, and a work mobile on Verizon. Although I have 4 bars on both phones, nome and at work, ATT sounds like a landline and Verizon's like a tin can and string!

I COMPLETELY agree with everyone's comments on their (ATT) customer dis-service. Oh well, they haven't pi$$ed me off too much, I need a new phone and I'm eligible for the $99 model. Can't wait to get my iPhone!!!

Posted By Mark – Tallahassee, FL: June 11, 2009 2:14 PM

I do not have an Iphone.. I've always wanted one, but I'm currently on Verizon, and won't switch to AT&T just to get an Iphone.. Ever since the early cell phone days, the best advice has always been, "Choose your network first, and then choose a phone that will work on your network." I'd rather be on a good network than have a great phone on a lousy network, and where I am, Verizon offers the best coverage.

As for those whiners complaining about not being eligible for a discounted upgrade, GROW UP! You signed a contract, so quit complaining. Did anyone really think Apple wouldn't come out with a better phone before their 2-year contract was over? If so, then they are an idiot. And for those complaining about AT&T, I can tell you that Verizon would never allow its customers to upgrade at a discount before their contract is up, so this is not limited to AT&T, it is just the reality of business and technology.

Posted By Tom, Boston, MA: June 11, 2009 10:12 AM

This is all getting a little old. People buy something knowing exactly what they're getting, then still complain because technology improves. I also never hear anyone giving props to AT&T (which I do have, and which does have much worse call quality than Verizon in the SF Bay Area). Verizon admitted they turned Apple down. AT&T took a huge risk in giving Apple this much control and completely changing their network. This is improving things for all cell users. The Storm, Pre, Android would not exist if not for both the iPhone and AT&T's leap of faith.

They are trying to see how little they can provide to each iPhone user in terms of service but, guess what, you didn't have MMS when you got that 2-year contract.

So quit complaining, and thank both Apple and AT&T for starting the revolution.

Naturally, I would jump at a Verizon iPhone (once they have a network which works with the rest of the world), but still I give AT&T props.

Posted By Kevin, SF, CA: June 10, 2009 5:41 PM

DM Chicago wrote:

"From a brand standpoint, AT+T is poisoning the Apple."

Sure. And Apple knows that.

That is why they made sure that everyone at the WWDC understood that AT&T were refusing to play ball with the newest technologies on offer with iPhone 3.0 OS.

Did you notice that everyone laughed when AT&T were absent from the list of telco's who were supporting MMS and tethering? That means Apple has decided to go ahead with the technology and leave AT&T behind. I'm in Switzerland, and I have two companies who are willing to offer me tethering and MMS on the new iphone.

Given that we had to wait a full year after the US for the original iphone to be released, all I can say is HA!

AT&T is raping you folks. RAPING.

That is what you get for giving all your tax money to bankers and auto makers.

HA!

Posted By cynik, switzerland: June 10, 2009 9:44 AM

wah, wah, wah…

To anyone who wants to get rid of their iphones, I'll help you out of you misery, sell your iphone at ebay for $888. With that much cash and profit, you can get any phone you want. I suggest a nokia n97, just came out for a super bloated price of $700. No thanks needed, getting rid of you is a blessing.

Posted By monkeyboy, redmond, WAH: June 10, 2009 3:11 AM

I got my phone in July of last year. So I'm still in my 2 yr. contract. Next years phone will be even cooler. Oh well looks like I wont be getting THIS one. I'll get the next model that will let me see thru peoples clothes. :-) LOL

Posted By Brian, Houston Texas: June 10, 2009 1:07 AM

The entire cellphone industry in North America is absurd, and Apple is heading into absurdity with it. Imagine buying a refrigerator that would only run on power provided by an overpriced utility. The totally misleading $99.00 price for the existing 3G iPhone listed on Apple's site now has the ubiquitous asterisk / footnote / disclaimer attached. Tried to buy one today for my son, but was told my price would actually be $299. I have 5 family phones with AT+T, three of which are iPhones, but somehow I am not a "valued customer" and must pay the highest price? From a brand standpoint, AT+T is poisoning the Apple.

Posted By DM Chicago: June 9, 2009 11:12 PM

Reasons to wait til June 2010 before buying:

1) If you buy December 12th, then when the next iPhone comes out in June 2010 you'll be locked into a contract… for a long long time… with AT&T… who has a pussy 3G network.

2) 4G may come out in next year, June 2010'ish, except that AT&T's network is likely to not be ready.

3) AT&T may not be the sole iPhone provider by 2010 or 2011… we can only hope.

4) AT&T is tyranical; no SlingBox support (because they have a pussy network), and they have crushed tethering support (because they're greedy, and also because they have a pussy network).

Bottom Line: Give yourself every opportunity to escape AT&T's grip! Don't reward their mediocrity.

Posted By akimball, Salt Lake City, UT: June 9, 2009 6:53 PM

Do upgraders feel that they are being cheated in some way. When you sign the two year contract for an iPhone, doesn't that mean you are obligated in some way to stay pat for two years even though you know the iPhone is going to be upgraded every year.

I'm not sure of why there is griping on this part. Isn't it like if you take out a CD from a bank for two years and you want to withdraw money in one year, they give you a penalty. They tell you up front about that. Yet some of you would complain to the bank that they're being unfair? On what basis?

So is this complaint about paying more money for a newer iPhone while the contract is still in effect about the penalty amount being too high? The whole idea is for AT&T to lock you in so that they can make back the money because they paid Apple the whole cost of the iPhone up front. How is AT&T being unfair?

If you get a newer iPhone, then you're making them pay for another iPhone up front. I think the best option would be to wait until the contract expires. Or if you need the new iPhone so badly then just pay what they ask. You're not gonna beat them, so why get in a stew.

Posted By Constable Odo, Queens, New York: June 9, 2009 6:21 PM

FWIW, I think the author’s premise – buying a 3GS in Dec – is equally silly. At that point, it would be much better to wait another 6 months and get the next generation in June 2010.

ex ped: The author is buying it in December because they’re offering it to him for $199.

That was my point earlier, too. The author will still get a new one six months later for $199 and it will probably be the 3GSS (hopefully with a better name) boasting even greater speed, longer battery life, and other new features… But he will have to wait longer for that next upgrade instead!

Posted By Mike, Washington D.C.: June 9, 2009 3:15 PM

No whining from me. I'll need to wait until March of next year. So? I get GREAT VALUE from my phone as is. The fact that they make a phone now that is a better value is fine for those who are considering buying now, but a year from now (when I'm in the market) there will be an even BETTER phone.

BTW, I'd lay odds many of those posting negatives here are just dyed-in-the-wool Apple haters who wouldn't buy an Apple product even if it meant saving their pitiful little lives! To those I say: Have fun with your cruddy second-rate imitations!

Posted By Sacto Joe, Sacramento, CA: June 9, 2009 2:22 PM

I was always under the impression that current customers could upgrade at the subsidized price as long as they extend their contract another 2 years. Wasn't this the case in the past?

In any event, I got my first-gen in August 2007 and it's offering me the $199/$299 pricing.

What I was just reminded of, however, is that additional cost for texting AT&T is charging. I've been paying $30 for Data+1500 msgs, and now that'd cost me $45.

Posted By Geoff (Toms River, NJ): June 9, 2009 2:02 PM

not so fine print: i bought the first generation iphone in 2007. i upgraded in 2008 and got the 299.00 price for the 16GB 3G. i called AT&T today. i am eligible for the new GS on the 30th of July at the 16G price of 199.00 or the 32G price of 299.00.

Posted By gskorich, chicago IL: June 9, 2009 2:01 PM

I'm going to wait for those with the 3G to start selling them on Craigslist, buy it used, unlock it and put it on T-Mobile!

Posted By Mike, Tempe, AZ: June 9, 2009 1:40 PM

wow, too many idiots surfacing all over the web posting idiotic opinions. Get over the pricing and wait until you qualify for the lower pricing. Most are satisfied with the 3.0 software upgrade and aren't about to jump ship just because of the att pricing. You must also wonder why everything revolves around a phone, there must be so much missing in their miserable lives that they get so emotional about a phone.

Posted By ASP, NY, NY: June 9, 2009 1:31 PM

So which part of "subsidized price" are you guys missing? When you bought your 3G, you knew it was "subsidized" right? You did actually sign a contract, right? You actually read the contract, before you signed it – maybe even a cursory glance?

Sure, I agree, I think AT&T would be better off extending that subsidy, especially when it seems likely Apple will be making a 4G phone by 2010/2011 at which I'll be switching back to Verizon – minus some miraculous coverage expansion by AT&T. But Apple's fault? Apple's "epic failure"? No I think you just expected something you were not entitled too.

Posted By JWC, Durham NC: June 9, 2009 1:30 PM

The complaints on this subject are silly. It's no different than buying a blackberry in 2008 and trying to get a subsidized price on a new one in 2009 – it's not going to happen. AT&T – or any other carrier – won't give you a $200 subsidy every year.

FWIW, I think the author's premise – buying a 3GS in Dec – is equally silly. At that point, it would be much better to wait another 6 months and get the next generation in June 2010.

ex ped: The author is buying it in December because they're offering it to him for $199.

Posted By Steve Degarmo, San Diego CA: June 9, 2009 12:55 PM

You idiot. The Apple site doesn't tell you how time is left until you can upgrade at the subsidized price. Get you facts straight.

ex ped: It told me. Maybe it doesn't like you. Try being a nicer person.

Posted By noneya, los ga, CA: June 9, 2009 12:50 PM

@Glen

Because last year, ATT let G1 iPhone users buy and upgrade to the 3G iPhone despite the fat that 3G iPhone users paid the full price of the iPhone. They ether shouldn't have done that or the should subside the cost of the new iPhone. All this does is make me want to go to Verizon and camp there and until grows some balls and sense to go to the better carry. I'll give ATT $200, but its the last $200 they're getting from me.

Posted By Andy Zaky, Huntington Beach, CA: June 9, 2009 12:39 PM

I have a really crappy old phone and I am going month to month with Cingular. I figured if I waited I could get a better / smaller iphone just like I did when I waited for the ipod Nano a few years ago. I'm eager to see the performance of the video camera, as I am also in the market for one of those. If it can combine the two that would be great. I have a feeling the video quality will not be very good however.

Posted By Donovan, Nevada: June 9, 2009 12:37 PM

Well all of this BS from AT&T is causing me to reconsider if I will stay with iPhone of move to a similar smart phone but with a different carrier. Slower than most in rolling out new capability along with a lack of focus on constant loyal customer AT&T has lost the bubble and may very well lose me and my family as customers. Apple could help this problem by making an agreement with another carrier but they don't seem to want to do this. Too bad, I really like Apple products but not enough to get screwed in the process.

Posted By Bob Rancho Palos Verdes, CA: June 9, 2009 12:30 PM

everybody complaining about price are just a bunch of whiners. why does everybody think that att or apple should keep offering discounts? when you signed a 2-year agreement did you think that it would be 2 years before a new iphone would be available? the deal is simple. you get subsidized fully every 2 years and partially before that. why is that so hard for people to understand?

Posted By glen, naples fl: June 9, 2009 12:27 PM

Completely agree with everyone. Epic blunder on Att/Apple's behalf.

I won't pay this outrageous upgrade cost… but I'd break my contract and pay a $1000 if Verizon suddenly offered the iphone 3gs.

Posted By Atlanta, Georgia: June 9, 2009 12:16 PM

I have AT&T and have endured one of the weak free phones since April '08. I've been looking forward to getting the new iPhone, and have delayed getting a new phone until this one was unveiled. When I go to AT&T's website, and choose "Upgrade my phone" it says I'm eligible for a discount on 8/29/09. Does this mean I don't get hit with the AT&T penalty? It's ridiculous that loyal customers have to pay an extra fee, especially if I'm willing to add extra time to my contact AND increase my monthly payment to AT&T.

Posted By Dave, Boston, MA: June 9, 2009 12:15 PM

The "Epic Fail" in my life has been buying poor phones over the past 2 years. Ever since the release of the iPhone, all phone makers have regressed ten-fold. Now the non-iPhone options are simplistic no feature flip phone or trendy but useless crap phone. LG VU was the biggest mistake of my life. I'm not going to fall into the hype of the "Pre" because I've been burned by everyone else out there too many times. Now I'm buying the iPhone 3g S as soon as possible to end my misery. (Though my misery won't be completely ended until AT&T allows MMS.)

Posted By Tim, Parker CO: June 9, 2009 12:07 PM

I'm with poster Tom. I bought my 3G in October 2008 and I qualify for the best price possible, including the $18 upgrade. No problems here.

Posted By Shawn, North Canton, OH: June 9, 2009 11:59 AM

Everyone forgets that you can't use a GSM phone on a SDMA network. Therefore would Apple build out a whole new line of iPhones?Would carriers attach another device to every cell phone tower? Remember UHF and VHF on TV sets just a short time ago?

Posted By Drew, San Francisco, CA: June 9, 2009 11:59 AM

Why shouldn't AT&T and apple tie customers into their current contract? The customers have signed for the contract andhave been quite happy with it until now.

If they extended the contract for a further 24 months, what would then happen in 12 months from now when Apple bring out a further update? Perhaps for could sign another 24 months and be tied in for 48 months… Where does it end?

Posted By Greg Ashworth, Preston, UK: June 9, 2009 11:52 AM

When will apple let other carriers, i.e. verizon, tmobile, etc start to carry the iphone? Does anyone know where you can out?

Posted By Mary, Houston, Texas: June 9, 2009 11:51 AM

I don't think the iPhone 3G S is the biggest news out of WWDC. Here's why, http://bit.ly/dSlG2.

Posted By nebben, st. louis, mo: June 9, 2009 11:49 AM

I got my 3G in November 09. However, I am considering giving current phone to my wife and purchasing new 3GS this summer, if I can swap numbers on family plan.

Main reason is that I use the camera on the phone often, I would like a better camera. Also battery life is important. Given that I'd easily spend $150 for a digital camera, I don't mind buying another phone. The 1,2 or 3 hundred is just not a big consideration for me. It's the 2 year lock up.

Posted By Fedman, DC: June 9, 2009 11:48 AM

I waited to get an IPhone because, just like EVERYTHING else ALWAYS does, the price went down. It's called supply / demand. I apologize for anyone that paid more than $100 for it and felt they have been ripped off. I'm sure the value you got out of the phone is much more anyway. I truly wouldn't be too upset that the price sank to $99…it's just business. I will be buying one next week!

Posted By Anonymous: June 9, 2009 11:46 AM

I agree with waiting, but unless these are changes that you feel very strongly about I'd wait until next summer. I'm in the same boat with my 3G, but I don't hear anything I cannot live without for another six months (beyond December) until the next likely iPhone upgrade – given the typically annual schedule.

Posted By Mike, Washington D.C.: June 9, 2009 11:40 AM

While I understand AT&T's position on charging early adopters more upfront money for the new iPhone 3G-S, they could have accomplished more with charging the $199 fee and extending a person's contract an additional 2 years. For example, my iPhone 3G contracts lasts until August 2010; if AT&T locked me into my existing contract and extended it for two additional years until August 2012, they would have recouped the cost of the 3G-S and made much more money.

Posted By Anthony, New Milford, New Jersey: June 9, 2009 11:34 AM

I bought my phone on 7-26-2008. When I use the eligibility app it's says I can get the 3G S on 7-26-2009 for the subsidized rate ($199 or $299) with a new 2 year contract and an $18 upgrade fee.

Posted By Tom, Grand Rapids, MI: June 9, 2009 11:29 AM

Seriously. This is the type of shit that happens when Steve Jobs isn't running the company. He would never let this fly. He would rather not sell the 3G S iPhone than piss off a bunch of loyal customers. Ex. NBC.

Posted By Andy Zaky, Huntington Beach, CA: June 9, 2009 11:27 AM

I bought my 3G on day 1, and it tells me that I can upgrade on March 12th, 2010.

Looks like AT&T actively wants me to jump to Verizon as soon as that option is available.

Posted By Eric, Seattle, WA: June 9, 2009 11:27 AM

Dude. You're right. Its total bullshit. I can afford to buy the new iPhone but won't because its simply not worth the upgrades. I likely won't be buying it at Christmas either but would rather wait until next June when the 4th generation iPhone is released. This is an epic blunder on Apple/ATT's part. What they will find is that 3G iPhone owners are the ones most likely to buy the 3Gs and that sales of the new device won't do as well as people might think. The biggest advocates for the product are those who already own it. Epic fail.

Posted By Andy Zaky, Huntington Beach, CA: June 9, 2009 11:24 AM
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Philip Elmer-DeWitt

Philip Elmer-DeWitt
Steve Jobs, goes the old joke at Apple, is surrounded by a reality distortion field; get too close and you believe what he's saying. Apple has made believers out of millions of customers — and made a lot of investors rich — but Philip Elmer-DeWitt believes that an ounce of skepticism never hurts when writing about the company. He should know. He's been covering Apple – and watching Steve Jobs operate — since 1982.
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