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Consumer Affairs

AT&T Relents On iPhone Upgrade Pricing — Sort Of

Company will allow upgrades for users nearing end of contracts


By Martin H. Bosworth
ConsumerAffairs.com

June 17, 2009
When Apple introduced its souped-up iPhone 3GS earlier this month at bargain prices of $199 and $299, respectively, fans flocked to upgrade — but many found that to upgrade before their contract was up would cost them an extra $200, courtesy of AT&T's exclusive deal as the sole iPhone carrier.

Irate customers flooded tech blogs, social networks, and both AT&T; and Apple's discussion forums demanding the upgrade discounts be readjusted, and today AT&T relented — after a fashion.

According to AT&T's official statement, "We're now pleased to offer our iPhone 3G customers who are upgrade-eligible in July, August or September 2009 our best upgrade pricing, beginning Thursday, June 18."

"We invite you to come to our stores beginning Friday during normal store hours, although please be aware that customer demand may exceed supply in some of our stores. You may also preorder online," the company added.

The formula by which one qualifies for an upgrade is confusing many, as it involves factors including one's length of time as a customer, how much they spend, the time between their last iPhone purchase and the release of the 3GS, their credit history, and other variables.

Users under contract with AT&T for 12 to 18 months after purchase of a previous iPhone, and who spend $100 or more a month in services are generally eligible, the company said.

Customers who are within three months of their contract end date during the window of the 3GS eligibility are able to upgrade, but those who aren't are either stuck with their current iPhone or forced to upgrade at the higher price points of $399 and $499, respectively.

iPhone users expressed their unhappiness with AT&T's crippling of certain iPhone features in the 3GS, such as "tethering" (Using the phone as a modem to connect other devices to the Internet) and sending multimedia messages such as photos or videos. Apple, perhaps due to rumors that it may end its exclusive relationship with AT&T over the iPhone, not-so-subtly fed those criticisms when the 3GS was unveiled.

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