General Question

Wine3213's avatar

3g iPhone pricing loophole?

Asked by Wine3213 (1108points) July 3rd, 2008 from iPhone

I read an online article earlier that said that the 3g iphone would be subsidized, therefore only costing $199/$299 to people who already paid retail for a phone. Or, if you were close to renewing your contract.

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4 Answers

Dog's avatar

I was under the impression that it would cost $200.00 for everyone. However the plan for the G3 is $10.00 more a month.

Wine3213's avatar

So did I, but here it is. http://jounce.net/2008/07/01/iphone-3g-upgrade-policy-makes-sense
It might just be a rumor though.

sndfreQ's avatar

What are you asking us? Are you asking if this is a loophole?

The answer is no, as the article points out. I bought the original iPhone the day it came out and paid $599 “up front” which was the unsubsidized price (there was no subsidy for the iPhone 1.0). Since original iPhone users paid full price, they owned 100% of the hardware at the time of the initial sale and setup.

If you buy an unsubsidized iPhone 3G you will pay full price up front, a “total cost” of $599/$699, but that is also the price you’ll pay if it’s a subsidized phone, except that you’re paying part of the money up front ($199/$299), and the remaining balance is paid out of your monthly charges (a portion of the monthly charge going toward paying the balance) that you will pay over the next 24 months that you’re locked in to your AT&T contract.

The new iPhone 3G is offered as a subsidy mainly as an incentive for new customers who are not locked to another carrier or those who are not currently in a subsidized contract with AT&T (those poor souls are still paying off their current phones with their monthly installments), and partly as a deterrent for those who want to “unlock” their phones and go to another carrier (other than AT&T).

Essentially a subsidy forces the customer into the contract by way of the “bait” of the discount; you pay the $199/$299 as a sort of “down payment” on the phone, but you are tied to the 24-month contract, from which a portion of each monthly charge is factored as an “installment” toward the physical phone; when a customer opts out of their contract, the penalty that is charged is used in part to defray the cost of the remaining balance on the phone.

Here’s another link that provides AT&T’s pricing and info on subsidy versus non-subsidy.

Hope this helps.

crunchaweezy's avatar

I think it’s a great idea. I also purchased the iPhone the day it came out, and I’ll be eligible for the upgrade for the advertised prices.

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