AT&T Alters iPhone 3G S Upgrade PolicyAT&T Alters iPhone 3G S Upgrade Policy

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Apple iPhone 3G S When Apple unveiled the iPhone 3G S last week, many existing iPhone users were eager to upgrade but were dismayed to learn they would have to pay extra to get the latest Apple smartphone. AT&T said it has heard customers' complaints, and it has made the new iPhone more affordable for some of its subscribers. "Like most U.S. carriers, we offer a variety of phones that we sell below our actual cost when customers agree to sign service agreements," AT&T said in a note to customers. "All that said, we've been listening to our customers. And since many of our iPhone 3G customers are early adopters and literally weeks shy of being upgrade eligible due to iPhone 3G S launching 11 months after iPhone 3G, we're extending the window of upgrade eligibility for a limited time." The second-largest U.S. carrier said those who are eligible for an upgrade in July, August, or September will get the company's best upgrade price Thursday. This is just in time for the Friday launch of the iPhone 3G S, and means certain existing customers can get the device for $199 or $299 depending on storage capacity. The move will likely placate some iPhone customers, but it will not affect users with a later upgrade eligibility window. AT&T said customers who spend $99 or more a month generally get to upgrade faster than those with lower plans. Existing iPhone 3G users with a later upgrade window will have to pay a $200 premium to upgrade to the latest iPhone. The second-largest carrier has faced much criticism for its iPhone upgrade policy, but it is a standard practice in the U.S. mobile industry. The iPhone 3G was able to reach the $199 price point last year because AT&T subsidized it by at least $400 per handset to attract new customers and get subscribers on data plans. The cost of these subsidies hurt AT&T's expected earnings in the short run, and having to subsidize millions of new iPhones from existing customers each year could affect its long-term earnings.
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