iPhone 3GS Upgrade Price Depends on How Profitable You Are

There’s been a lot of discussion about the pricing of the new iPhone 3GS for existing iPhone 3G customers. A lot of iPhone 3G customers, including Warner Crocker, aren’t too happy that they’ll have to pay $499 if they want to upgrade early.

I can understand why AT&T doesn’t want to subsidize an iPhone 3GS for customers that are in the middle of their contracts, but I wish they the “rules” for existing customers were a little clearer and transparent.


On Monday I considered pre-ordering an iPhone 3GS 32GB, but saw that I’d have to pay $499 if I wanted it delivered on June 19. If I waited until July 30 (exactly one year after I was able to buy the iPhone 3G), I’d qualify for the full discount. I think I can ‘live’ with my iPhone 3G for an extra month for $200.

When I bought my first iPhone in June of 2007, she opted for a Samsung Blackjack (subsidized) when we switched from Palm Treos and Sprint. I bought her an iPhone in March 2008 (unsubsidized) and an iPhone 3G (subsidized) the same day I bought my iPhone 3G.

My wife is also interested in the iPhone 3GS, but Apple’s online store said she would have to wait until next March to get the fully subsidized price. To me, it seemed sensible that we would both qualify for the fully subsidize phone on the same date since I bought both iPhone 3G’s at the same time. But according to Apple.com, my wife’s line wasn’t eligible for the fully subsidized price until March, 2010.


I called AT&T to see why our eligibility dates were different and if there was some sort of mistake. Apparently, I was eligible for an early upgrade because my line of service is very profitable and AT&T wants to reward me with an early upgrade, just a year after fully subsidizing my iPhone 3G. My wife’s line isn’t as profitable, because she has the secondary line on our Family Talk plan.


The Family Talk plan includes 2,100 minutes per month and costs about $200/mo after you add in 3G service, SMS, taxes and fees. Her phone’s portion of the bill is $9.99 for phone service, and $29.99 for 3G service. Obviously, her line isn’t nearly as profitable as mine.

According to the rep I spoke with, AT&T evaluates each line of service to determine whether or not they can receive an early upgrade. He said that a lot of customers have called in and found that their more affordable phone is listed as the primary line, while the iPhone 3G(s) on their accounts are listed as secondary. He says in those cases, if the devices were flip-flopped, they would’ve been eligible for an early upgrade.

While I certainly appreciate AT&T offering me an early upgrade, I really wish the ‘rules’ were more cut and dry.