I don't know what a "fair price" is to charge for the upgrade, but I do understand that they need to charge SOMETHING. I think it's pretty much understood in the cell phone industry that when you buy a cheap phone, it's because you took the bait and now you're caught on a 2 year contract.
Now that being said, I think it was handled poorly. There was no transparency to end-users at the keynote. I think they need to make it very black and white.
For example, "And we're selling it at $199 and $299. And for those iPhone customers wishing to upgrade that are not yet eligibile, there will be a $100 subsidy surcharge added to the price. You are eligible for an upgrade after 1 year or something or blah blah blah"
I just think it sucks the way people found out... when they tried to buy it...
This is something I don't understand about the mobile marketplace.
We pay monthly for a service, we pay more for the phone. What does it matter which phone it is on if they are promising the same service? And why a premium on the access point to the actual service?
It's because when a phone is subsidized, the CARRIER pays a portion of the cost of the phone, in the iPhone's case, $200. Let's just say that a carrier added on an additional $8.33 to our bill in order for us to pay back what they essentially loaded us when we bought the phone (8.33x24=200). If they allowed us to buy ANOTHER subsidized phone after only one year, the would "lend" us an additional $200, but we would have only paid back $100 of our initial "loan". If that happened, the carrier has now LOST $100 from everyone that upgraded early. On an person by person scale, that isn't a lot, but how many people bought an iPhone 3G on launch day in the US, 1 million? That's $100 million that AT&T would loose, which doesn't seem fair to them (granted, they haven't been the fairest of companies to us). That is why carriers are allowed to charge an early termination fee. The fee essentially forces the customer to pay back the remaining balance of their "loan".
I agree if you kept your old phone. But ATT can easily refurbish the phone and resell it to recoup most if not all of this charge. There's something to be said for treating existing customers with preference for staying with you (that monopoly ain't going to last forever).
Have you ever returned a phone? If you leave AT&T, switch to a new carrier, or even just upgraded your phone, I have never seen them take back an old phone.
I still have every old phone (well kept them) and resold them all on ebay.
That says they won't do it...not can't. They need to change. This is a business choice they're making, and it's a bad one. With competition, they would be offering people upgrades with a refurb for their trade-ins. People who purchase a new car every 1-3 years have the option of doing a trade-in against a new model (even if the trade-in price is low balled). The least they could do is make the offer. The upfront subsidy to Apple's already been paid at the time of the original sale.
Think about the price of a car though, and the utility it retains. Sure it's an old model, but car technology has changed tremendously in 3 years. Apple is reducing the cost of a 3G iphone to $99 NEW (with plan). What could they offer you as a trade in for an old one? 15 bucks? AT&T wouldn't be able to sell a referb for $99, plus it's added inventory, cost of refurbishing, etc. It's not worth it.
your point is well taken, however, it also points out the 'unfair' $200.00 charge... Since $100.00 has already been 'paid' back. An early upgrade therefor should cost $100.00 for extending your contract an extra year, or, $200.00 if you want to keep your current contract. Now that is 'fair'.
well said. It's a loan, not a subsidy. Pay back your loan.
That being said, if we have paid back $8.33x12, or $100 of that original loan, shouldn't our upgrade fee be the remainder of our existing loan, not the original value?
If I buy a house for $200,000 and pay it off for 15 years, then buy another house, I have to pay the mortgage company the payoff value of the loan, not the original $200,000. I think that's the big argument.
AT&T is loaning you $200 to help pay for the phone. We've all been paying out payments for a year, but AT&T is not dropping the payoff value of that loan.
Literally the ONLY thing that matters in this case, legal or moral, is the contract the buyer signed. The contract has the full obligation of the buyer explicitly stated for anyone to read. End of story.
If the people whining about "fair" and such have no idea the can of worms they're trying to open up by claiming that a contract should be allowed to be nullified should one of the parties decide they no longer like the terms.
Remember: one of the parties to the contract is the carrier. What kind of $h!tstorm would people be whipping up if AT&T started whining about "fair"? Be careful what you wish for.
your comments, though interesting, is far from what is being discussed. Nobody is denying they are in a 2 yr contract, nor are they 'whining' about the terms. If they leave early, they are to pay 175.00 to offset the phone subsidy.
What is disturbing here is that AT&T wants it both ways... they want new contracts and are unwilling (to this point) to have any cost to them for that new contract.
Since, in this case, the 2 yr contract is already 1/2 over, that should be taken into account when resigning a new contract for 2 more yrs. AT&T should have some 'rebate' program for that additional obligation that they are asking for on a new IPhone purchase. This is not to say they must do so, but good,smart consumer companies understand consumerism. Doing 'the right thing' concerning current customers provides customer loyalty.
This is a point that AT&T never has quite understood. Your free to look at their customer service ratings... there is a reason they are so bad!
The house parallel is bad. A house has a resale value that is usually higher than the one you paid, so you end up making money. Electronics and cars are very different, they ALWAYS depreciate (they are damaged, however minimally, and they become obsolete FAST).
I do think that AT&T should implement a table of upgrade values that is a little more flexible than the all or nothing strategy they currently have. I have a friend that is two months away from the upgrade eligibility, it seems AT&T is stupid to discourage his purchase with such as steep price... he has been talking about moving to the Pre out of anger. If the upgrade fee was an additional $50, I am sure he would not be so angry.
I suspect anyone who's bought a house in the last 3-4 years would disagree with your house price comments. Several of my neighbors bought at the top of the market and are sitting on big losses if they tried to sell. Oh, wait, maybe that IS just like the used cell phone market...
Your comment seems to be clever, but it isn't. Just as you said, anyone who bought a house in the last 3-4, this is an anomaly when it comes to real estate, whereas cellphones, cars, etc, have always resold for less than they are bought.
So next July 2010, when Verizon ink's a deal with Apple then 1 million US customers walk out of AT&T's door. So, let's says an average of 100 dollars a month x 12, that's over 1 billion lost! Good move AT&T! You could have locked these customers in another 2 year deal through 2012!
Although ATT has a lot of money to recoup with the subsidized iPhone, they have a couple of things to think about here. First if they burn a lot of people now they are likely to loose a lot of people when another carrier has the iPhone. Second, they are surely more than making up the cost by all of the data plans and text plans that are truly outrageous. We are all paying way too much for the service as it is so they should strongly consider making more people happy to keep them on ATT in the future. Text messages cost a carrier basically nothing and yet they are going to charge us $15 a month to have 1500 (ludicrous). Anyway, I will quit while I still have my cool.
It's not what it "cost" to the company that determines the price, it is what people are willing to pay. Why you you lower the price when people are willing to pay $15?
Business are in the business of making money. Not giving people what they want at a loss to themselves. Did you fund AT&T deployment of their network? Did you fund Apple's R&D work on the iPhone? Yes, buy paying for the product and services. You signed and agreed to EVERYTHING in that contract.
Well someone should teach AT&T how to run a business well then. You are aware of course that AT&T has been bankrupt several times for mis-management and that the current AT&T is in name only really. AT&Ts of the past continued to lose business due to (I'll give you one guess!... poor customer service)
They need to do something to fix that perception or given time for the market to compete, they will lose there customer base yet again.
$200, well in my families case we are being asked to pay $699 per iPhone 3G S 32GB which I found outrageous. I personally sent a letter to AT&T, coping Apple and my federal elected officials asking for this policy to be reviewed. As this is an anti-consumer policy to say the least. AT&T exclusive contract for the iPhone makes this problem worse and should be addressed. Couple this along with the price we as consumers are forced to pay for on txt'ing rates and again is a reason for our government to at least hold a hearing about it. I am expecting calls from AT&T and Apple today regarding my letter. I say expecting as I received an email from AT&T asking for my account information and that they would call me today and I missed a call from Apple and asked me to call them back today which I plan to do first thing.
I have outlined more information at www.mobileminds.com if you care to read it.
Maybe they will call you to tell you learn to read.
A contract is a contract. This is industry standard and has NOTHING to do with Apple.
Why are you being asked to pay $699 per phone? Its because you dont want a contract. $699 is only for people who want month to month. Its $599 per phone if you are not eligible for an upgrade.
This is the same thing that would happen if you got one of those junk free Motorola phones. Then all of the sudden a year later you wanted same the Samsung Jack which is $149 with a 2 year contract. Guess what you would have to pay $349 because a year ago you got a free phone.
I think the whole reason this country is in such a financial crisis right now is because no one understands any more that someone has to pay.
These cell networks and upgrades and data services are not light switches, you cant just build them hit a switch then incur no costs for ever.
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Hmmm
I don't know what a "fair price" is to charge for the upgrade, but I do understand that they need to charge SOMETHING. I think it's pretty much understood in the cell phone industry that when you buy a cheap phone, it's because you took the bait and now you're caught on a 2 year contract.
Now that being said, I think it was handled poorly. There was no transparency to end-users at the keynote. I think they need to make it very black and white.
For example, "And we're selling it at $199 and $299. And for those iPhone customers wishing to upgrade that are not yet eligibile, there will be a $100 subsidy surcharge added to the price. You are eligible for an upgrade after 1 year or something or blah blah blah"
I just think it sucks the way people found out... when they tried to buy it...
to those who voted no: I hate
to those who voted no: I hate att with as much ad the next person but.. you signed a contract idiots! pick your fights a little more wisely
You cant expect to be able to
You cant expect to be able to upgrade your phone each year without paying a premium.
Why not
This is something I don't understand about the mobile marketplace.
We pay monthly for a service, we pay more for the phone. What does it matter which phone it is on if they are promising the same service? And why a premium on the access point to the actual service?
It's because when a phone is
It's because when a phone is subsidized, the CARRIER pays a portion of the cost of the phone, in the iPhone's case, $200. Let's just say that a carrier added on an additional $8.33 to our bill in order for us to pay back what they essentially loaded us when we bought the phone (8.33x24=200). If they allowed us to buy ANOTHER subsidized phone after only one year, the would "lend" us an additional $200, but we would have only paid back $100 of our initial "loan". If that happened, the carrier has now LOST $100 from everyone that upgraded early. On an person by person scale, that isn't a lot, but how many people bought an iPhone 3G on launch day in the US, 1 million? That's $100 million that AT&T would loose, which doesn't seem fair to them (granted, they haven't been the fairest of companies to us). That is why carriers are allowed to charge an early termination fee. The fee essentially forces the customer to pay back the remaining balance of their "loan".
I agree if you kept your old
I agree if you kept your old phone. But ATT can easily refurbish the phone and resell it to recoup most if not all of this charge. There's something to be said for treating existing customers with preference for staying with you (that monopoly ain't going to last forever).
Have you ever returned a
Have you ever returned a phone? If you leave AT&T, switch to a new carrier, or even just upgraded your phone, I have never seen them take back an old phone.
I still have every old phone (well kept them) and resold them all on ebay.
That says they won't do
That says they won't do it...not can't. They need to change. This is a business choice they're making, and it's a bad one. With competition, they would be offering people upgrades with a refurb for their trade-ins. People who purchase a new car every 1-3 years have the option of doing a trade-in against a new model (even if the trade-in price is low balled). The least they could do is make the offer. The upfront subsidy to Apple's already been paid at the time of the original sale.
Think about the price of a
Think about the price of a car though, and the utility it retains. Sure it's an old model, but car technology has changed tremendously in 3 years. Apple is reducing the cost of a 3G iphone to $99 NEW (with plan). What could they offer you as a trade in for an old one? 15 bucks? AT&T wouldn't be able to sell a referb for $99, plus it's added inventory, cost of refurbishing, etc. It's not worth it.
your point is well taken,
your point is well taken, however, it also points out the 'unfair' $200.00 charge... Since $100.00 has already been 'paid' back. An early upgrade therefor should cost $100.00 for extending your contract an extra year, or, $200.00 if you want to keep your current contract. Now that is 'fair'.
well said. It's a loan, not
well said. It's a loan, not a subsidy. Pay back your loan.
That being said, if we have paid back $8.33x12, or $100 of that original loan, shouldn't our upgrade fee be the remainder of our existing loan, not the original value?
If I buy a house for $200,000 and pay it off for 15 years, then buy another house, I have to pay the mortgage company the payoff value of the loan, not the original $200,000. I think that's the big argument.
AT&T is loaning you $200 to help pay for the phone. We've all been paying out payments for a year, but AT&T is not dropping the payoff value of that loan.
Literally the ONLY thing that
Literally the ONLY thing that matters in this case, legal or moral, is the contract the buyer signed. The contract has the full obligation of the buyer explicitly stated for anyone to read. End of story.
If the people whining about "fair" and such have no idea the can of worms they're trying to open up by claiming that a contract should be allowed to be nullified should one of the parties decide they no longer like the terms.
Remember: one of the parties to the contract is the carrier. What kind of $h!tstorm would people be whipping up if AT&T started whining about "fair"? Be careful what you wish for.
your comments, though
your comments, though interesting, is far from what is being discussed. Nobody is denying they are in a 2 yr contract, nor are they 'whining' about the terms. If they leave early, they are to pay 175.00 to offset the phone subsidy.
What is disturbing here is that AT&T wants it both ways... they want new contracts and are unwilling (to this point) to have any cost to them for that new contract.
Since, in this case, the 2 yr contract is already 1/2 over, that should be taken into account when resigning a new contract for 2 more yrs. AT&T should have some 'rebate' program for that additional obligation that they are asking for on a new IPhone purchase. This is not to say they must do so, but good,smart consumer companies understand consumerism. Doing 'the right thing' concerning current customers provides customer loyalty.
This is a point that AT&T never has quite understood. Your free to look at their customer service ratings... there is a reason they are so bad!
Your upgrade fee should be
Your upgrade fee should be the remaining portion of the unpaid loan ($100) as well as the amount to subsidize the new phone ($200).
The house parallel is bad. A
The house parallel is bad. A house has a resale value that is usually higher than the one you paid, so you end up making money. Electronics and cars are very different, they ALWAYS depreciate (they are damaged, however minimally, and they become obsolete FAST).
I do think that AT&T should implement a table of upgrade values that is a little more flexible than the all or nothing strategy they currently have. I have a friend that is two months away from the upgrade eligibility, it seems AT&T is stupid to discourage his purchase with such as steep price... he has been talking about moving to the Pre out of anger. If the upgrade fee was an additional $50, I am sure he would not be so angry.
I suspect anyone who's
I suspect anyone who's bought a house in the last 3-4 years would disagree with your house price comments. Several of my neighbors bought at the top of the market and are sitting on big losses if they tried to sell. Oh, wait, maybe that IS just like the used cell phone market...
Your comment seems to be
Your comment seems to be clever, but it isn't. Just as you said, anyone who bought a house in the last 3-4, this is an anomaly when it comes to real estate, whereas cellphones, cars, etc, have always resold for less than they are bought.
Really?
May have been true a couple years ago, not the case now, House values are driven by the Market, not the case here.
So next July 2010, when
So next July 2010, when Verizon ink's a deal with Apple then 1 million US customers walk out of AT&T's door. So, let's says an average of 100 dollars a month x 12, that's over 1 billion lost! Good move AT&T! You could have locked these customers in another 2 year deal through 2012!
I totally agree. It's
I totally agree. It's business kids, American style. Deal with it.
Fair or not it's what the
Fair or not it's what the market will bare. When you walkaway because the price is more than your willing to pay then the price will come down.
Did you notice you can buy a no contract iPhone now if your willing to pay the price?
Although ATT has a lot of
Although ATT has a lot of money to recoup with the subsidized iPhone, they have a couple of things to think about here. First if they burn a lot of people now they are likely to loose a lot of people when another carrier has the iPhone. Second, they are surely more than making up the cost by all of the data plans and text plans that are truly outrageous. We are all paying way too much for the service as it is so they should strongly consider making more people happy to keep them on ATT in the future. Text messages cost a carrier basically nothing and yet they are going to charge us $15 a month to have 1500 (ludicrous). Anyway, I will quit while I still have my cool.
It's not what it "cost" to
It's not what it "cost" to the company that determines the price, it is what people are willing to pay. Why you you lower the price when people are willing to pay $15?
"Text messages cost a carrier
"Text messages cost a carrier basically nothing"
What are you basing that on!?
Data rates... the litteral
Data rates... the litteral cost to send a text to another phone is zero.
It's called a business
Business are in the business of making money. Not giving people what they want at a loss to themselves. Did you fund AT&T deployment of their network? Did you fund Apple's R&D work on the iPhone? Yes, buy paying for the product and services. You signed and agreed to EVERYTHING in that contract.
Well someone should teach
Well someone should teach AT&T how to run a business well then. You are aware of course that AT&T has been bankrupt several times for mis-management and that the current AT&T is in name only really. AT&Ts of the past continued to lose business due to (I'll give you one guess!... poor customer service)
They need to do something to fix that perception or given time for the market to compete, they will lose there customer base yet again.
$200, well in my families
$200, well in my families case we are being asked to pay $699 per iPhone 3G S 32GB which I found outrageous. I personally sent a letter to AT&T, coping Apple and my federal elected officials asking for this policy to be reviewed. As this is an anti-consumer policy to say the least. AT&T exclusive contract for the iPhone makes this problem worse and should be addressed. Couple this along with the price we as consumers are forced to pay for on txt'ing rates and again is a reason for our government to at least hold a hearing about it. I am expecting calls from AT&T and Apple today regarding my letter. I say expecting as I received an email from AT&T asking for my account information and that they would call me today and I missed a call from Apple and asked me to call them back today which I plan to do first thing.
I have outlined more information at www.mobileminds.com if you care to read it.
Sigh
Another whiner thinks he's entitled to something, despite the fact he signed a contract. Let's grow up folks.
Maybe they will call you to
Maybe they will call you to tell you learn to read.
A contract is a contract. This is industry standard and has NOTHING to do with Apple.
Why are you being asked to pay $699 per phone? Its because you dont want a contract. $699 is only for people who want month to month. Its $599 per phone if you are not eligible for an upgrade.
This is the same thing that would happen if you got one of those junk free Motorola phones. Then all of the sudden a year later you wanted same the Samsung Jack which is $149 with a 2 year contract. Guess what you would have to pay $349 because a year ago you got a free phone.
I think the whole reason this country is in such a financial crisis right now is because no one understands any more that someone has to pay.
These cell networks and upgrades and data services are not light switches, you cant just build them hit a switch then incur no costs for ever.