Why Apple and AT&T now have legions of disgruntled iPhone customers
This may be my last iPhone/AT&T post of the day and week, maybe even month or year.
I bought an iPhone 3G in January from an AT&T store. The helpful AT&T salesman told me, when I asked him point-blank, that I would be able to upgrade to a new iPhone handset if one debuted during my contract period, without paying a marked-up price.
I wanted to believe him. I did, in fact. But really, he was just a sales guy -- his word was not bond. Not when big corporations are involved. And deep down, there was a little voice, which I muffled and ignored, which kept saying: Fat chance, Sentementes. You're gonna pay...and pay again.... and again.... and again.
Fast forward six months: Yesterday was a banner day for Apple. They introduced new MacBook Pros, a new Safari browser, some new functionality to MobileMe, highlighted the new iPhone OS 3.0, and of course, the new iPhone 3G S.
Loyal customers of Apple can buy every single one of those products for the price listed by Apple. Except for the new iPhone 3G S. For this new handset, if you're a current iPhone 3G customer with an AT&T contract, you have to pay at least a $200 premium to get the new phone.
This is the reality of wireless economics -- since AT&T has to buy each new handset from Apple for something like $600 a pop, and then subsidize it to attract new subscribers. I get it. There are apparently millions and millions of early- and late-adopting iPhone 3G customers who are going to have to "get it", too. Though across the Web's social networks, the vehemence that many are showing toward AT&T and, to a lesser extent, Apple, which sets the price of the handsets, is pretty deep. (Here's a Twitter petition to sign if your hackles are still up.)
If you're a cheery optimist, though, you might say that this is the kind of dilemma that most companies could only dream of having: consumers clamoring for product and demanding better pricing. Better than not clamoring at all, right?
But what bothered me most was that the millions and millions of iPhone 3G customers had to essentially find out that via word of mouth and on Twitter -- or in the very fine, faint print on Apple's website -- that they would have to pay the loyal customer premium. Or perhaps they logged in to their AT&T account online to discover the news. (I can't give AT&T my $199 until September 2010, my account says.)
New iPhone 3G S/AT&T customer: you get it (the 16GB version) for $199.
Loyal/current customer: you get it for $399.
This pricing approach was not mentioned by Apple at their big developer's conference yesterday (where, incidentally, developers booed AT&T every chance they could, according to the LA Times.) Indeed, the pricing for current iPhone 3G customers wasn't even an asterisk or footnote in the day's festivities.
This pricing approach also was not mentioned in the press release that AT&T sent over to me yesterday. An AT&T spokeswoman emailed me the pricing for existing customers in response to my email query.
We're all adults here. Why is it so difficult to be upfront right out of the gate with these costs? Especially to customers who are already paying some of the highest wireless costs around for the privilege of using Apple's iPhone?
Furthermore, in an era now where smartphones seem to be developing radically new features every few months, does this type of business model offer the best solution for consumers and companies?
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