Apple’s WWDC keynote yesterday was probably one of the more exciting one’s we’ve seen for a while now. We got a few quick looks at Snow Leopard (and it’s amazing $29 price tag) and we got the big announcement of the new iPhone. I for one was completely excited. Unfortunately, there’s a huge stink brewing on the internet from iPhone 3G[pre-s] customers who are upset that they wont be able to take advantage of the $199 and $299 price points. To those people I’d like to say the following: “Owning a iPhone 3G[pre-s] is not different than owning a Blackberry, Motorola, or any other cell phone. If you’re ineligible for an upgrade, you have to pay more”.

This is the way the cell phone industry has ALWAYS worked. The cost of the phone is always far higher than what you’re paying. Your carrier, in this case, agrees to pay a portion of the phones cost if you are willing to guarantee them that you’ll stick with them for 2 years. This serves two purposes: 1) the cheaper price point is more attractive to the customer (you), and 2) they can afford to do it because they’ll make that money back by the end of the two years.

The whole ‘upgrade plan’ that all the carriers have (I think Verizon’s is called ‘new every two’ or something like that) is not them being nice to you. At the end of your two years, you’re no longer on a contract. This means that at any point you could just decide you want to move to another carrier and ditch them. So, they sucker you in by offering to subsidize a new phone for you. You agree and then you’re locked in.

Now if you ever decide you want to switch to a new phone while you’re still on the old contract, this causes a problem. Your carrier still hasn’t made that money from you completing the alloted term of your contract. So, why should they subsidize another phone for you? Well, the truth is they shouldn’t, and they don’t. It’s no different than any other phone upgrade.

I know, I know, I can hear the replies now. “but what about when the second phone came out. iPhone users didn’t have to pay extra to upgrade to the iPhone 3G[pre-s]!” You’re right, but I’d like to remind you of two VERY important facts regarding that:

1) The original iPhone was not subsidized! We all paid $499-$599 for the damn thing. ATT can subsidize our next phone because we’re not still paying them back for our last one.

2) The SAME EXACT price increase applied for ineligible people trying to upgrade to the iPhone 3G[pre-s] from their RAZRs and Blackberry’s.

So in short (well, you know what I mean), before you all get up in arms and cream out to the masses that apple is screwing over everyone who bought an iPhone last year. Just take a step back, breathe a bit, and realize that unless you want carriers to completely stop subsidizing phones all together, this is how it’s always going to be.

posted by Christopher Schnese

From the moment I unboxed my original EDGE iPhone, waited more than 10 seconds for a webpage to load, and maxed out its hard drive with one video and a few CD’s, I knew I would one day buy it’s successor. Then when the SDK was announced and they admitted the iPhone 3G’s existence, I committed to buying one right away. Finally, when I found out that my Bush Stimulus check would be arriving the same day of the subsidized phone, I decided it was fate (lol). So this morning I decided to take a little stroll over to the ATT store to fulfill my destiny. This is what happened instead.

So this morning I woke up a little earlier than normal with hopes of possibly procuring an iPhone. I normally wouldn’t want to pick one up on Launch day (because of the mayhem), but I’m going on a camping trip this weekend and I won’t be able to pick one up till later next week. So, without too much expectation, I decided to just drive by a few ATT stores on my way into work and see how bad the lines were. Of course, they were horrible and with all the reports of failed activations I figured it would be better if I just went in to work early and waited a few hours for the lines to die down. So I did just that.

Around 10:30am I pulled out my phone and try to call up the closest ATT store. Instead of a customer service rep, I got some stupid recording with a bunch of different options. After about a minute and a half of that, I just hung up and decided to head by the store and see for myself. When I showed up to the store, there were still about five people in line, but it wasn’t enough to turn me off. I hopped in line assuming that there wouldn’t be a line if they were out of phones. Just then a guy pulled up in his car and yelled, “hey, do they still have phones?” Almost in Unison the line replied, “um… yeah… I think so… I sure hope so…”

Now keep in mind that at this point there was an ATT customer service representative standing in the front of the line in full view and ear shot of everyone. So I stood there for a grand total of about seven minutes before the woman, who had just gotten to the front of the line, asked the representative which models they had left. It’s only then that the guy told the woman that there weren’t any phones left. Here’s the thing. He just told it to her as if it wasn’t important information to the rest of the people in the line. It wasn’t untill she turned around all upset and told us that we even knew.

Here’s the best part. As we were all standing there pondering who’s genius idea it was to keep it a secret that they were all out of phones, a UPS truck AND a FedEx truck rolled up and start off loading boxes of iPhones. We all sort of looked at each other for a second, turn to the rep, and said “those are iPhones, right?”. You know what his response was?

“Yes those are. But those are Saturday’s shipments and we’re not allowed to sell them till tomorrow.”

Are you kidding me? Really? I mean I sort of understand it, but what the hell? Then they started pushing this stupid fulfillment order nonsense. Basically asking everyone to sign up now, and ATT would special order them a phone that would arrive in a week or so. Now I’m no rocket scientist, but why on earth would I sign up now and wait a week for my phone from these guys when I could just walk into another store tomorrow or monday and have plenty of stock available (like what happened with the EDGE iPhone). So I left, and I’m going to buy my iPhone from an Apple store  in a few days.

All in all, I wasted only about 30 minutes, but I completely lost what little respect I had for ATT during that time. It’s not like it puts me back much since I’m going to be camping all weekend and I’ve been using the 2.0 firmware and the new apps since yesterday, but I thought it was seriously lame.

posted by Christopher Schnese