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iPhone News: AT&T Relents On Upgrade Pricing - Sort Of
      #33501 - 06/18/09 11:45 AM

Since no purchasers of the iPhone 3G are eligible yet for an equipment upgrade, we previously reported that ATnT intended to charge iPhone 3G customers who decided to upgrade to a new iPhone 3GS $399 for a 16 GB model, or $499 for a 32 GB model. (These prices also required a new 2-year agreement replacing your existing contract.) Although these prices were lower than the no-commitment unsubsidized prices, they are higher than the prices for new customers ($199/$299) who were not already in the middle of a contract. However, ATnT has since released the following statement:

"An Update for Our Customers

Some customers have had questions about our plans and policies for iPhone 3G S, and we'd like to provide you with answers. We'd also like to announce a change to the date when some iPhone customers are eligible for our best upgrade pricing to iPhone 3G S.
Pricing

Importantly, we want our customers to better understand our wireless device upgrade program. Like most U.S. carriers, we offer a variety of phones that we sell below our actual cost when customers agree to sign service agreements. In general, the more a customer spends with us, the quicker they become eligible for a price break on a new device. For example, iPhone customers who spend more than $99 a month per line with us generally are eligible for an upgrade between 12 and 18 months into their contract.

We also currently offer early upgrade pricing only for iPhone 3G S and iPhone 3G.

All of that said, we've been listening to our customers. And since many of our iPhone 3G customers are early adopters and literally weeks shy of being upgrade eligible due to iPhone 3G S launching 11 months after iPhone 3G, we're extending the window of upgrade eligibility for a limited time.

We're now pleased to offer our iPhone 3G customers who are upgrade eligible in July, August or September 2009 our best upgrade pricing, beginning Thursday, June 18.

If you're one of the many customers who will benefit from this change, please note that our upgrade eligibility tools will reflect this change on Thursday, June 18.

We invite you to come to our stores beginning Friday during normal store hours, although please be aware that customer demand may exceed supply in some of our stores. You may also preorder online on June 18 at www.att.com/iphone, and your iPhone 3G S will arrive in 7 ? 14 days. Or you can purchase iPhone 3G S at Apple's retail and online stores, as well as at other popular retailers.

If you're one of the customers who benefits from this change, and you've already preordered from an AT&T store, we'll adjust the price of the device when you pick it up. If you benefit from the change and you pre-ordered from AT&T online, we'll send you an e-mail and issue you a credit.

If you pre-ordered an iPhone 3G S through Apple's online store, your upgrade eligibility will be reassessed based on AT&T's new upgrade policy for iPhone 3G owners. If you are eligible for the lower price, Apple will issue you a credit for the difference as applicable.

So, what if you still aren't eligible for our best upgrade pricing and you still want iPhone 3G S now? You do have options:

* You may qualify for the iPhone 3G S early upgrade price of $399 (16GB) or $499 (32GB).
* You can pay full retail?and not have to sign a 2-year contract?at $599 (16GB) or $699 (32GB).
* You can wait until you're eligible for our best upgrade pricing. We invite you to check your upgrade eligibility by visiting www.att.com/iphone, calling *NEW# (*639#) on your AT&T device (we'll send you a text with upgrade information), or visiting any of our over 2,200 stores.

If you want more details on our pricing and upgrade policy, check out our FAQs. And as always, you may visit one of our stores to talk with a representative.
In Summary

We've listened to our customers ? and hope our response helps answer some of your questions and concerns.

We are incredibly proud to be the U.S. carrier for the new iPhone 3G S and will work around the clock to be ready on June 19 to serve customers who are interested in the fastest, most powerful iPhone yet."

In other words, the "early upgrade" prices will remain for customers with lower-cost iPhone plans, but customers with the most expensive plans will now be offered the fully subsidized price.

Editorial: Since even the lower-priced iPhone plans are very expensive, and since AT&T has made things even more confusing and complicated (and with only one day's notice), I think there is a substantial risk that this will increase customer dissatisfaction rather than alleviating it.


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To read our latest iPhone 3G articles please visit:
iPhone 3G In-depth Review
iPhone 3G First Look
iPhone 2.0: Untold Story
Cruising the Apple App Store
iPhone 3G Videos



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