Apple iPhone Users Cry Foul Over AT&T Upgrade Policy

(click image for larger view)
Apple iPhone 3G S

AT&T's iPhone subscribers are urging AT&T to reconsider its upgrade policies to allow owners of 3G iPhones to upgrade to the new iPhone 3G S model at the discounted price offered to new customers and subscribers eligible for subsidized upgrades.

"If you are a loyal iPhone user like me, contact [AT&T] through e-mail, phone, whatever -- let your voice be heard," wrote a disgruntled iPhone user on the AT&T support forum. "Let them know you will not be quiet. Do whatever it takes."

AT&T will offer the new iPhone 3G S when it debuts later this month at a cost of $199 and $299 for the 16-GB and 32-GB models, respectively, to new customers and those who qualify for the discounted price.

AT&T subscribers with an iPhone 3G who aren't eligible for an upgrade -- those not near the end of their two-year contracts -- can still upgrade to an iPhone 3G S, but must pay $200 more -- $399 for the 16-GB model and $499 for the 32-GB model.

Without a contract commitment or upgrade discount, the iPhone 3G S costs $599 for the 16-GB model and $699 for the 32-GB model.

"This is ridiculous and a slap in the face to long time loyal iPhone customers like me who switched from T-Mobile and the only reason was the iPhone," wrote another unhappy iPhone customer. "We have to mount a vigorous campaign to change this policy. Call your local AT&T and ask for the manager and complain. Send e-mails and post in forums everywhere."

Not everyone agrees, however. Several posts in the AT&T support forum argued that iPhone users should suck it up and abide by their contractual commitments.

"The option you have is to honor the contract you freely committed yourself to," argued another person participating in the discussion. "If you want to upgrade early then you will have to pay full price with no subsidy discount. You can't blame anyone but yourself for your predicament."

The issue is also spurring debate on the Apple support discussion forums. A Canadian iPhone user claimed that the situation is even worse for subscribers of FIDO, a Canadian mobile carrier. FIDO, he said, will not offer upgrades to the iPhone 3G S to subscribers still under contract. He will thus be unable to upgrade to a 3G S until the end of his three-year contract in 2011.

"This policy does not make sense to me," he said in an online post. "It doesn't serve Apple's interests to have iPhone sales restricted in such a manner and it certainly does not serve my interests."

"What we're trying to do is to be fair," said AT&T spokesman Mark Siegel. "Customers in the U.S. enjoy very, very low device prices. The financial models of wireless are built on that. If you want to change your device in midstream, we want to help you do that, but you have to look at the economic realities."

The iPhone may be your next full-function computer. InformationWeek has published an independent analysis of this topic. Download the report here (registration required).