AT&T to customers: Have we got an iPhone deal for you!

June 9, 2009

Apple fans whooped it up yesterday when the company announced its first sub-$100 iPhone and a pair of faster, improved iPhone models.******But if you’re an existing AT&T customer and you’re looking to get your mitts on Apple’s newest gizmo, you might not be so excited by the fine print.******It turns out that the $99 iPhone is actually $499 for many existing AT&T customers. The new 16GB iPhone 3GS -0 the one that features video capture, faster throughput and a digital compass — which Apple unveiled for $199, will cost AT&T customers $599. And the new 32GB version is available to AT&T customers for the very special price of $699, which is significantly more expensive than the $299 price tag that anyone else can buy it for when they walk into an AT&T store for the first time.******The higher prices require renewing a 2-year contract with AT&T.******Update: AT&T said on Thursday that existing AT&T customers who renew their two-year contract can purchase the iPhones for $299 (for the 8GB model), $399 (16GB) and $499 (32GB), rather than the $499, $599 and $699 prices listed on Apple’s Web site. The higher prices are to purchase phones without any contract.******And the folks at AT&T also throw in an $18 activation fee. This activation fee applies to all AT&T customers who get a new device, whether it’s an iPhone or a more basic gadget. The problem is that the iPhone is such a high profile device that it brings everything from the carrier’s network quality to its contract fine print right into the forefront.******In fairness, it isn’t unusual for a carrier to hold off on selling its existing customers heavily subsidized phones until they’ve been a customer long enough to have repaid the debt. AT&T spokesman Mark Siegel explained:***

The key here is that the iPhone and our other devices are subsidized. The consumer is paying much less than the cost we will typically pay for devices.


As a way of offering those prices we ask them to enter a 2 year contract to cover the cost and give a return to our shareowners.

******Siegel noted that certain customers may still be eligible for the low iPhone prices, depending on how far along they’ve gotten in their existing contract and how promptly they’ve paid their bills. But he said there wasn’t a specific cut-off point in in the 2-year contract that guarantees the better prices — the terms are different for different customers.******So, if AT&T likes you, you’re in luck. Otherwise, you may have to shell out more duckets than your neighbor for Apple’s latest goodies.


We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see

[…] Read the rest of the article here Share and Enjoy: These icons link to social bookmarking sites where readers can share and discover new web pages. […]

Posted by My iPhone Site » AT&T to customers: Have we got an iPhone deal for you! – Reuters Blogs | Report as abusive

I dont understand all the fuss, when a new car model comes out, do you get to upgrade ???, same goes with pc’s or any electronic device

Posted by Robert | Report as abusive

Its simple – I don’t buy a new one until the price comes down. The free Market works – If Apple wants my business they offer me a product at a price I will pay. If Apple needs my business they they lower the price – If I need a phone I pay more – at some point it will balance. I Got my 3G in December its Great – No need to upgrade for that amount

Posted by Tony | Report as abusive

I am a current iPhone 3G owner, and I was thankful last year for not having to pay a subsidy and be able to upgrade. I’m NOT a “loyal” AT&T customer and don’t care much for it either and I’m positive AT&T feels exactly the same way.Since the beginning of mobile carriers and their service contracts -and cancellation fees- this has been a common practice; buy a phone, sign a contract and that was that. Simple business-consumer relationship.If we all agree (iPhone users and non-iPhone users) that there isn’t a single mobile device currently available or has ever been available (not comparing performance, or features) that has iPhone like fan base, community, and or consumer hype. Then we must agree that mobile carrier industry must change the way it looks at the upgrade is being looked at. Model doesn’t fit anymore. Innovate, specially if you are an exclusive carrier.P.S. Robert, you don’t sign contracts, and pay different prices when you buy a CAR, and or PC.

Posted by Nasir | Report as abusive

While I am bummed out that I would have to pay $699 plus $18 plus tax for the newer iPhone (3GS), I understand why I can’t get a a discount: I am still paying off my iPhone 3G that I purchased on release day last July.The silver lining here is:1)the new hardware is great! but not a world apart from the phone I already have.2)since I bought the iPhone 3G on release day, I only have to wait until 12/12/09 to get a discounted 3GS, not bad, that is less than 2 yrs. into my contract; 1 1/2 yrs. to be more exact. By then, the bugs will be ironed out, and then I’ll have two iPhones, one as an ipod touch with camera and the other as my phone.

Posted by Phillip Jacobson | Report as abusive

Not a very smart move to exclude existing customers from this deal. When they first launched the iPhone they had the only smartphone on the market, but now there’s is plenty competition with sometimes superior and cheaper products. AT&T runs the risk of their clients defecting to the competion if they keep excluding them from good deals.

Posted by Nikkei 225 | Report as abusive

I don’t see what the big deal is either… Almost all service carriers charge a premium when customers purchase phones out of contract. If you wanted to purchase a Blackberry from Verizon without renewing or starting a contract, it would cost $599. My contract was up, and as a result of me renewing for another two years, that Blackberry came down to $110.People fail to remember that the AT&T store is not the only place you’ll be able to purchase the new iPhone. The internet has a host of places where you can purchase phones out of contract at prices less than half of what they go for in the AT&T store.

Posted by Andre | Report as abusive

Meh – if suckers want to pay so much for a phone that they wont fully use or really need let them – I am fine with my 4 year old phone that is falling apart – and guess what!? I am not paying off a phone i got 1 year ago – cough* Nasir *cough. Thats part of the problem we are facing now with the economy – living beyond your means!And yet here we are taking a year to pay off a phone!Hah!

Posted by Sebastian | Report as abusive

What is stupid is the overall price. There is no way that the iPhone cost so much. Look at how the prices of cars have fallen. They are selling brand new cars for 50% from original MSRP, and still making money. Everything in this country is marked up to crazy amounts. It is just another way for the big companies to rip us consumers off. I also remember when the contracts were 1 year. What happend to that?

Posted by ItsAllStupid | Report as abusive