The iPhone users can get the new iPhone 3G S for a starting price of $199, but existing iPhone 3G owners have to pay $399 or more to upgrade.
The policy doesn't make sense: Most companies try to hang on to return customers. So why are AT&T (NYSE: T) and Apple apparently penalizing return customers -- charging people who bought last year's iPhone 3G a $200 premium to upgrade to the new iPhone 3G S?
The policy doesn't make sense: Most companies try to hang on to return customers. So why are AT&T (NYSE: T) and Apple apparently penalizing return customers -- charging people who bought last year's iPhone 3G a $200 premium to upgrade to the new iPhone 3G S?
The answer has to do with the practice of "subsidies," the standard way that cell phoneset sold in the United States. It works out well for consumers, at least most of the time. It remains to be seen whether the subsidy process has broken down in the case of the iPhone 3G S, or if complaints are coming from a tiny, but vocal, minority.
Apple introduced the iPhone 3G S at its annual Worldwide Developer Conference on Monday. The device offers a processor upgrade and other hardware improvements that boost performance by double or triple previous models. The new phones now include video recording, a better still camera, and a built-in compass to improve location-based applications. The phones also have double the storage of current models. The price is $199 for 16 GB of memory, $299 for a 32-GB model -- for most users. For people who bought an iPhone 3G, the price is $200 higher.
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