JEK
Senior Insider
By DAVID POGUE
Published: June 10, 2010
It's that time again. New iPhone coming out June 24. It'll probably be a huge hit. It'll probably deserve it. And reviewers who dare to say so will be buried by toxic mail from the Apple haters.
It's not my favorite time of year.
Accompanying all of this, of course, will come the usual waves of rage from people who bought last year's iPhone, furious that they won't get the $200 new-customer price from AT&T.
This year, though, I'm ready. I'm launching a pre-emptive strike. I'm explaining how the American cellphone subsidy system works, for the benefit of you iPhone upgraders, and providing AT&T's answers to your questions in advance.
O.K., here we go.
First: Why don't you, a loyal iPhone 3GS owner, necessarily get the new iPhone for the same $200 price new customers do?
Here's the full answer, which I provided at this time last year: http://nyti.ms/pOkXz
Here's the essence of it (sorry for the copy-and-paste job, but the answer is the same this year as last year):
The $200 is just a down payment. You'll pay off the rest through the remaining months of your contract with Verizon, AT&T, Sprint or whatever. By signing a two-year contract, you're agreeing to reimburse the carrier over time.
Therefore, it's not greed or price-gouging for AT&T to charge existing iPhone customers more than it charges new customers for the new iPhone.
Now, you might well argue: "Well, hey, how long does it take me to pay off my subsidized phone? Surely not the entire two years!"
You're right. It's somewhere between 12 and 24 months. Why does it vary? Because different people are on different plans. Some people pay $70 a month, some pay $150, whatever. The more you pay each month, the faster AT&T recoups the phone's real cost.
Once AT&T has recouped the full price of the older iPhone, you are "upgrade eligible." You can now buy a new phone at the new-customer price. At that point, the cycle begins anew. (And by the way, yes, you'll face the same issue in June 2011 or whenever the next iPhone model appears.)
This year, AT&T is trying to stave off the outrage in two ways:
* If you would have become upgrade-eligible between now and the end of 2010, you get the new-customer price for the new iPhone: $200. (All answers here pertain to the 16-gigabyte iPhone model. Add $100 in each case for the 32-gig model.) You've just saved six months of waiting to get that lower price.
* If you wouldn't have become eligible until 2011, AT&T is once again offering its "early upgrade" program. That is, no matter how long you've had your older iPhone, you can upgrade to the new one for $400-even if you just got the iPhone last month. That $200 surcharge takes care of whatever you still "owe" on your old iPhone.
All righty then. So how much will you have to pay for the iPhone 4 if you're an existing customer?
Here are the answers to various questions, as posed to me by one of my readers this week. He wrote that "the tech forums are filled with different versions and permutations of versions of who pays what, when, and why to grab the new iPhone. Customers are getting different answers from different sources, and mayhem has erupted on the web."
Q: I have an iPhone. How much will I pay for the iPhone 4?
A: If you're "upgrade eligible," you get the new-customer price: $200.
The "early upgrade price," offered only to existing iPhone owners, is $400. That's for someone not yet eligible for an upgrade but who still wants the iPhone 4 right away.
Both require a new two-year term agreement and voice and data plans.
Q: What are the details of getting the "new customer" price on the new iPhone even if I'm not technically eligible for it?
A: AT&T is offering the $200 "new customer" price to any existing iPhone owner who would have been eligible for an upgrade in 2010--between now and the end of this year. Of course, you also get the $200 price if you've had an iPhone for even longer than that.
Q: Does the cost of your current AT&T plan affect your upgrade date and price?
A: Yes. In considering your eligibility for an upgrade, AT&T looks at how much you spend each month (more is better), whether or not you pay your bill promptly, and how far you are into your contract.
Q: What are the upgrade prices for the following types of customers?
* Current customers owning a previous iPhone model: Either $200 or $400, as described above.
* Current AT&T customers without iPhones: Ditto.
* Non-AT&T customers wanting to switch: $200.
* New customers who have never had a cellphone: $200.
* Customers who want an iPhone 4 without the two-year contract: $600.
The bottom line, though, is this: you can save yourself a lot of calculating and headaches just by calling AT&T's customer-service line and asking what you'll pay. You can also go to att.com/iphone and log into your account or punch *639# on your phone and you'll get a text message with the information.
Published: June 10, 2010
It's that time again. New iPhone coming out June 24. It'll probably be a huge hit. It'll probably deserve it. And reviewers who dare to say so will be buried by toxic mail from the Apple haters.
It's not my favorite time of year.
Accompanying all of this, of course, will come the usual waves of rage from people who bought last year's iPhone, furious that they won't get the $200 new-customer price from AT&T.
This year, though, I'm ready. I'm launching a pre-emptive strike. I'm explaining how the American cellphone subsidy system works, for the benefit of you iPhone upgraders, and providing AT&T's answers to your questions in advance.
O.K., here we go.
First: Why don't you, a loyal iPhone 3GS owner, necessarily get the new iPhone for the same $200 price new customers do?
Here's the full answer, which I provided at this time last year: http://nyti.ms/pOkXz
Here's the essence of it (sorry for the copy-and-paste job, but the answer is the same this year as last year):
The $200 is just a down payment. You'll pay off the rest through the remaining months of your contract with Verizon, AT&T, Sprint or whatever. By signing a two-year contract, you're agreeing to reimburse the carrier over time.
Therefore, it's not greed or price-gouging for AT&T to charge existing iPhone customers more than it charges new customers for the new iPhone.
Now, you might well argue: "Well, hey, how long does it take me to pay off my subsidized phone? Surely not the entire two years!"
You're right. It's somewhere between 12 and 24 months. Why does it vary? Because different people are on different plans. Some people pay $70 a month, some pay $150, whatever. The more you pay each month, the faster AT&T recoups the phone's real cost.
Once AT&T has recouped the full price of the older iPhone, you are "upgrade eligible." You can now buy a new phone at the new-customer price. At that point, the cycle begins anew. (And by the way, yes, you'll face the same issue in June 2011 or whenever the next iPhone model appears.)
This year, AT&T is trying to stave off the outrage in two ways:
* If you would have become upgrade-eligible between now and the end of 2010, you get the new-customer price for the new iPhone: $200. (All answers here pertain to the 16-gigabyte iPhone model. Add $100 in each case for the 32-gig model.) You've just saved six months of waiting to get that lower price.
* If you wouldn't have become eligible until 2011, AT&T is once again offering its "early upgrade" program. That is, no matter how long you've had your older iPhone, you can upgrade to the new one for $400-even if you just got the iPhone last month. That $200 surcharge takes care of whatever you still "owe" on your old iPhone.
All righty then. So how much will you have to pay for the iPhone 4 if you're an existing customer?
Here are the answers to various questions, as posed to me by one of my readers this week. He wrote that "the tech forums are filled with different versions and permutations of versions of who pays what, when, and why to grab the new iPhone. Customers are getting different answers from different sources, and mayhem has erupted on the web."
Q: I have an iPhone. How much will I pay for the iPhone 4?
A: If you're "upgrade eligible," you get the new-customer price: $200.
The "early upgrade price," offered only to existing iPhone owners, is $400. That's for someone not yet eligible for an upgrade but who still wants the iPhone 4 right away.
Both require a new two-year term agreement and voice and data plans.
Q: What are the details of getting the "new customer" price on the new iPhone even if I'm not technically eligible for it?
A: AT&T is offering the $200 "new customer" price to any existing iPhone owner who would have been eligible for an upgrade in 2010--between now and the end of this year. Of course, you also get the $200 price if you've had an iPhone for even longer than that.
Q: Does the cost of your current AT&T plan affect your upgrade date and price?
A: Yes. In considering your eligibility for an upgrade, AT&T looks at how much you spend each month (more is better), whether or not you pay your bill promptly, and how far you are into your contract.
Q: What are the upgrade prices for the following types of customers?
* Current customers owning a previous iPhone model: Either $200 or $400, as described above.
* Current AT&T customers without iPhones: Ditto.
* Non-AT&T customers wanting to switch: $200.
* New customers who have never had a cellphone: $200.
* Customers who want an iPhone 4 without the two-year contract: $600.
The bottom line, though, is this: you can save yourself a lot of calculating and headaches just by calling AT&T's customer-service line and asking what you'll pay. You can also go to att.com/iphone and log into your account or punch *639# on your phone and you'll get a text message with the information.
