Source: Tom's Guide | Keywords: iPhone, at&t, apple | Themes: 3GSM, Smartphones
Apple charges exorbitant prices, but plays fair. That’s a popular opinion among consumers who’ve grown accustomed to the trendy company’s “elitist egalitarian” approach to selling computers, digital media devices, and now mobile phones.
Any person can own a piece of shiny Apple gear, and every person who decides to buy in will pay the same high prices for admission to the club. That’s equal opportunity exploitation, and it defines Apple’s brand cachet, along with the company’s consumer-friendly, easy-to-grok retail experience.
But with new AT&T stipulations announced Tuesday regarding the pricing and policies of iPhone 3G plans, many would-be buyers of the newly upgraded Apple device are shaking their heads in dismay. This time around, AT&T has set some new rules, and they’re not exactly one-price-fits-all or comprehensible. Apple customers old and new are about to say goodbye to the sheltered Apple retail experience of yore and will now face the reality of the cellular carrier business through AT&T. Apple’s been in the business of simplifying things for consumers for years. This is hardly AT&T’s claim to fame.
Does Apple really want to get in bed with a company (AT&T) and an industry (telecom) known for dissembling, price-gouging, complicating, and confusing consumers?
It’s hard to fault AT&T for raising basic prices on iPhone 3G service plans: After all, 3G networks cost more money to build and operate, and it is natural that some of that cost would get passed on to consumers. iPhone 3G plans now start at $70 for 450 minutes (this includes unlimited data and Internet usage). But here’s where the natural price increases stop.
This new basic iPhone 3G plan includes no text messages. Text messages, light data bits which cost relatively little for a carrier to whip around its network, were included on last year’s AT&T iPhone plan. Text message plans now range from an extra $5 to $30 per month. What was once free is now rather expensive. This is akin to Apple jacking up prices for iTunes tracks, or suddenly charging for once-free podcasts. Apple just wouldn’t do it.
The most egregious act committed by AT&T, and one in which Apple is actually complicit, is the announcement that the iPhone 3G is not universally priced at $199/$299. Steve Jobs shouted from his keynote mountain top on June 9 that the new iPhone will cost $199/$299. While restrictions and caveats were always a possibility, they were never explicitly mentioned. On July 1, AT&T confirmed what few Apple-watchers had predicted: The cheap price is not for everybody.
The cheap price, according to AT&T, requires not only a two-year contract, but a qualifying upgrade status. If you don’t qualify, you pay $399/$499 instead. Who doesn’t qualify? Good question. AT&T doesn’t exactly make its upgrade eligibility requirements very straightforward (so totally, shamefully, “un-Apple”). Here’s the company’s upgrades policy: “Device offers are made available from time to time based on a number of factors: service tenure, spending levels, payment history, usage practices and other factors.”
If you have an AT&T account, you can log-in to your account page on the company’s Web site and find out if you are eligible. So far, reports from AT&T customers suggest that people who’ve renewed a contract in the last 18 months are not eligible to buy the subsidized iPhone 3G.
Of course, new AT&T customers qualify for the cheaper iPhone 3G. But AT&T has also created another class of customer. Original iPhone (not 3G) owners have clout and status above regular people in AT&T’s world. If you bought the first-gen iPhone, you are privileged to buy the new iPhone at the discounted price. Apple isn’t typically in the business of creating first-class, special-rewards, or frequent-buyer programs. It’s not a classy, high-end thing to do. But Apple isn’t in charge here.
And it is hard to image Apple ever allowing for the possibility of this kind of nonsensical loop-hole: AT&T customers who’ve recently renewed a contract could conceivably cancel their contracts (usually less than $200 for the cancelation fee), then create a new account with AT&T and sign up for a subsidized iPhone. Doing this might actually cost less than paying $399/$499 for the unsubsidized iPhone 3G.
AT&T has left several frequently-asked-questions un-answered on its handy-dandy tip sheet. The company shows how an iPhone 3G family plan works, but chooses not to explain how a family plan involving iPhones and also non-iPhones would operate (and how much they would cost). There are price increases here, too: Traditional AT&T family plans require a $10 fee for adding an additional line. Adding an iPhone costs $40.
But what happens if you attempt to create a family plan that already has text messages bundled in, as well as shared minutes and data, and you toss an iPhone 3G into the mix? Can the iPhone 3G line use some of the bundled text message without paying for its own? AT&T chooses not to answer, and Apple certainly won’t weigh in. Doubtless, there are dozens of similar questions about plans and rates.
These types of nitty-gritty questions are, frankly, beneath Apple’s notice. Apple doesn’t want to touch all of this messy pricing stuff with a ten-foot pole, but by not actively involving itself in the policy details of the sale of its own forthcoming phone, it might begin to lose the high customer-service marks and relatively polished brand image it has cultivated in recent years.
Last year, Apple controlled the retail experience by offering consumers an easy way to activate their iPhones with an AT&T plan via iTunes software. That convenient experience courtesy Apple is now gone, as well, leaving AT&T to run Apple’s customers through a meat-grinder of a purchasing system that has always catered to the lowest common denominator.
AT&T, in its press releases, leaves much unsaid. You can buy an iPhone from an AT&T store come 8 a.m., July 11. But wait, can’t we also buy an iPhone from an Apple store at the same time? Right? AT&T doesn’t say. Neither does Apple. Confusion ensues. Confusion isn’t good for consumers thinking about dropping hundreds of dollars on a device and a monthly subscription. And it certainly isn’t good for Apple, either.
What about the currently available info on iPhone 3G pricing and plans seems unfair or confusing to you? Which of your questions haven’t been answered with the kind of clarity you expect? We invite you to share your gripes in the comments section below.
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Those eligibility rules seem fairly standard for the cell phone arena.
It doesn't seem like they're doing anything different for the iPhone....
I've used AT&T for about 5 years now, and my god has it been miserable. Not only is their customer service piss poor, the network is god awfully slow with tons of dropped calls. And that's just the start of it. Don't join AT&T. You'll be kicking yourself.
To be clear, I want an iPhone. I really want an iPhone. But I won't be getting one. I'm already having so much misery dealing with having had to replace 4 defective Blackberries (worst piece of garbage in electronics this side of the Phillips CD-I). I finally got a Blackjack II which is serving me alright. However, I want the iPhone, because I like my iPod touch and would like to have the convenience of a phone that works with all those features.
But, the iPhone will be too expensive, and AT&T is the most greedy and untrustworthy company I have come across. No way I am falling into this trap. Maybe Apple, instead of being greedy, should have considered making the Phone available to other carriers. That way there wouldn't be the need to activate the phone in store and have such ridiculous pricing, because people wouldn't buy it to hack it.
These new pricing policies are ridiculous. I can understand upping the data plan charge (a little!) for unlimited 3G (though they should provide a price tiered approach based on usage needs) - but where did the "twice as fast half the price" moto go!? My cell phone died on me 8 months ago so I renewed my contract knowing that iphones were not subject to contract based pricing. I got a free crappy phone waiting for the next iphone to come out. Now I have to pay $500 for it along with a 25% increase in plan rates?? Either they increase the rates and allow for all iphone buyers to get the carrier subsidized version or they leave the rates as is and make people pay the full price as it was previously. People like me (numerous for sure) get to pay for both! Maybe I'll just wait for Android compatible phones and switch companies!
(and don't get me started on SMS charges! why is it the same price as a unlimited 3G data plan, isn't it data as well ??!!)
Folks in Hong-Kong might pay $500 for their iphone but they get 500 minutes AND unlimited SMS for USD$24/month!
I would KILL to have it as good as you guys. Just look at the pricing strategies in Canada for the Rogers iPhone and you will be glad AT&T is your cellular provider!
I agree, I've been eagerly waiting for the iphone 3g for months. Now, AT&T has put me off to the whole thing by not only charging me $200 for the phone (quite a gift for being a loyal customer) because I am mid-contract and also jacking up the plan price to $80 (including basic 200 text messages). Totally ludicrous, I'll probably just leave ATT altogether when I'm done in March...
The whole idea of charging for texts msg is a crime. Check Asia.
The telecom companies that package and sells these txt plan, is no better than drug cartels.
why wont' AT&T DIE? this company has shady origin, so shady that history doubts the founder really invent the telephone.
Cell phone growth hasn't stop, and landlines is dying, these gougers are opportunistic pigs that will set erronous price plan for future to come.
This is absolutely ridiculous. I would have gladly spent the $299 for the 16GB iPhone AND paid the $30/month for the data plan, but based on the new pricing I'm seriously thinking about bagging ATT entirely and paying the early exit fee to do so. This has definitely burst the balloon the original announcement created.
This is really unbelievable--It's the bait and switch that has me angry. 1. Apple announced new lower pricing--no hint of an "if." 2. AT&T has always stated that the iPhone was apart from their normal contract prices--so you just have to pay the cost Apple charges (that was what they told me when I switched over but decided to wait for the new iPhone). 3. AT&T listed the cost of the new plans--and I was ready to pay the extra (which, I believe originally included 200 text messages). 4. Now, all of the above are no longer true--if I want an iPhone I have to pay full (old price) freight, plus increased cost per month.
On top of that, now I read that the 'family plan' with iPhones will be $40 extra per line instead of $10--that is truly low low low. I've written to Apple, will write to AT&T, but will they care? Doubt it.
It all comes down to GREED. Stinking f**king GREED. If Apple doesn't want to get involved in carrier pricing then why not offer an UNLOCKED iPhone and let the consumer choose? Cell phone carriers are all in bed with manufacturers now. They have become so accustomed to ripping users off every month that they would suck the blood from our veins if they could with their plan pricing, but they are oh-so-happy subsidizing the shitty "Made in China" devices we get.
It's not just AT&T. T-mobile is just as bad. What was once free GPRS access is now a pay-only option. And even with a text message plan, send just one SMS overseas and you'll be hit with $0.15.
But of course, as long as there are IDIOTS out there that will STAND IN LINE to pay $100+/month, we will ALL be exploited - the not-so-well-off but more-educated included.
I think stop-complaining hit the nail on the head. Lets be clear about this.. you don't need to have an iPhone. You may think you do, but really you don't, so if you don't like the deal don't buy it.
Has life been dumbed down so much that you can't manage your life with a Nokia?
It would be hilarious if it wasn't so tragic.
Stuart
Wow, I can't believe you all are looking at this like they are ripping you off. They finally drop the price for people that sign a new contract and you all get bent up about it. if you want you can still buy the phone for the old price, nothing stopping you. But for new and old cust that have the ability to sign a contract can now get it for half the price is great.
I also like to say about the family talk for $40 a month is $10 for the additional line and the $30 for the data. If you look at the blackberry and the other pda, then you will see that they are also paying $30 a month for the data services. I think it was unfair for the cust who already had those and paying those prices, to see people walk in and get a iphone with data and text for less.
also like to add:
as far as I can tell if you get the unlimited family talk text for $30 for up to 5 phones a month that counts for the iphone also. which seems better then paying $40 a month for each iphone to have unlimited text and data.
I had my iphone since it came out and I finally cancelled yesterday. I found it to be expensive, and that's not even the ridiculous 3g plan. Like anonymous/stuart said, I woke up yesterday, and asked my self....
"self...do I really need to be paying $60+ dollars a month for this? Can I live without this?" The answer is yes people.
I have been a BellSouth, Cingular Wireless, and now ATT customer for some time at least 15 years. This is nothing new to me and seeing the new devices come out and wanting the new devices. Contract agreements can be altered if you have been with them as long as I have, I have done this in the past although they caught on about 6 years ago that I was calling every year to get an upgrade. I haven't pulled the upgrade card out of the deck in about 6 years, so it is coming out this time. If I cannot get the upgrade at the 200.00 cost I will buy the device out right without the contract. I know that people are going to gravel in pain over the cost, but if you are like me, I have been buying these overpriced devices that just don't work. I have been through various devices, phillips MP3, Cingular 8525, Cingular 8125, Cingular 3125, Blackberry Pearl, Motorola MPX200, Motorola MPX220, Samsung Black 2, Palm Treo 750M so on and so on. Long story short, the story with ATT hasn't changed and if you have ever used an Apple product then you know the quality of the product and you have paid for that quality. The horrible part is having to deal with ATT and their customer service and long lines.
I wish you well with all your ventures.
Just buy an HTC Diamond: It's smaller, lighter, faster, more capable, more scalable, you don't have to hack it to install free programs, gps built-in including a-gps, youtube, opera 9.5. Don't give AT&T and Steve Jobs the satisfaction by buying an inprisoned and inprisoning phone and contract.
First, about the quote:
"Original iPhone (not 3G) owners have clout and status above regular people in AT&T?s world. If you bought the first-gen iPhone, you are privileged to buy the new iPhone at the discounted price."
Original iPhone owners paid full price for their phones, which is why they are permitted to get a 3G for a subsidized price. Perhaps Ms. Rosmarin should have actually done some research before posting this article, I expect better from this site.\
As for the rest of the article and some of the comments, total hogweash. Apple/AT&T cut the initial price significantly for almost all users, and people still moan and groan. Perhaps a few of you would have been happier if Apple had stayed with their $399/$499 pricing, but I'm fairly certain Apple will sell many more phones due to their lower initial price. As for plan pricing, I would like to see 200 text messages thrown in the iPhone plan but $30 for unlimited 3G data is not out of line in today's market.
I do not have any Apple computer products at this time, but I will be getting an iPhone 3G. At $199 it is a screaming deal.
Some of you people are just stupid. From at&t view point its just a new phone and like any new phone that comes out new customers can buy it at the 2 year contract and current customers can upgrade it they qualified. Nothing new here. Two days before i found the new iphone was comming my phone broke and i had to get a new phone so i got a blackberry. I could have returned it but it was going to be more than 30 days for the iphone so i will have to wait for my upgrade. Now for the pricing for the second line being 40 bucks. Right now my line is a second line of my wife's account it cost 10 for the line and 30 for my blackberry package hello people that is 40 Bucks. The only difference is that i have a choice if i want to add the blackberry package and the iphone you must have a data package. Your just stupid if you dont, the pay per use of .01 per kb would cost you thosands of dollars each month. so an extra 30 fo the iphone is cheap. I know for a fact that people that use the iphone use an average more than 100x the use of data than other phones which have a data plan. And for the price of the phone Apple chooses how much to charge for the phone, so if att says the full price is 599 then that price is driven by apple not att. So when att prices the phone at 199 they are taking a 300 to 400 dollar hit on each phone for the 2 year contract. This is nothing new for any cell company. So my addvice is if you dont want to pay 500 or 600 bucks for it than dont!! free choice is a good thing
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I agree on the pricing issues. I won't be buying an iPhone 3G simply because of the so-called 'upgrade eligability' BS. Well, that and the fact that the phone has at least a half-dozen features my 2 YEAR old Moto phone has (mainly A2DP). It does do things very well that no other device can do, but it's missing too many features for the price in my opinion.
As far as I know, Apple is offering the ability to purchase the phones at an Apple store, but you still have to activate it during the sale. Will they have AT&T reps in the store? I have no idea, but let's hope not.