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New $199 iPhone is Just $599

by July 02, 2008
But I thought it was $199?

But I thought it was $199?

Fans of the newly announced $199 iPhone will soon be able to get it... for $599. Huh? According to a report on Reuters today, U.S. consumers who want the new iPhone but cannot or do not want to sign up for a new two-year contract with AT&T Inc will eventually be able to buy it for an extra $400... sort of. Maybe. Kind of.

Apple Inc has indicated that the new iPhone will go on sale July 11 at $199 for the model with 8 gigabytes of storage and $299 for the 16-gigabyte version. Of course, these prices apply to customers signing up for a two-year AT&T contract. For those non-iPhone owners who have not yet fulfilled their current contract or who may not be eligible for upgrades the price will be somewhat higher. A full video of all upgrade options is available here.

Note: Existing iPhone users will be eligible to upgrade to a new iPhone at $199 (plus an $18 upgrade fee) provided they bought their iPhone prior to July 11.

For existing AT&T subscribers not already using iPhone, here are the rules for eligibility:

Not all Cingular/AT&T customers may qualify for a cell phone upgrade. At this time, AT&T Mobility allows these customers to upgrade with no upgrade fee when they commit to a new 2-year contract:

  • AT&T customers who have had 24 months of cell phone service since activation of their cell phone or since their last phone upgrade.
Certain AT&T customers may be eligible for a cell phone upgrade even if they have been in their current plan for less than two years (24 months), if they commit to a new 2-year contract and meet these eligibility requirements:
  • Customer has had a standard calling plan plus data services costing at least $68.99 a month but no more than $98.99 a month, and who has been in contract (and not had a phone upgrade) for 21 months or more,
    or
  • Customer has had a standard calling plan plus data services costing $99 a month or more, and who has been in contract (and not upgraded) in the last 12 months.
A customer with a calling plan and data services of less than $69 who is 21 to 23 months into contract may upgrade for a fee and a commitment of an additional two-year service contract extension. No upgrade fee is assessed for any customers who are on a month-to-month agreement.

Note that AT&T upgrade eligibility may be further limited based on customer’s usage history, payment record, previous phone replacement, etc. Upgrade eligibility is solely determined by AT&T Mobility at its discretion.

You can check your upgrade eligibility online. So there are three upgrade options for AT&T contract subscribers:

  1. Existing iPhone customer can upgrade for $199 + $18 upgrade fee
  2. Upgrade-eligible (see above) customers can upgrade for $199 + upgrade fee
  3. Non-upgrade eligible customer can upgrade for $399

Those who don't want to be locked into such a contract, or do not have adequate credit (ie anyone who is recently under contract), can buy the iPhone for $599 or $699 as long as they sign up for some kind of AT&T wireless subscription, AT&T said on Tuesday. The ability to buy the phone without a contract doesn't necessarily mean that anyone can grab a new iPhone and unlock it (apart from eBay, that is.) What it means is that AT&T is trying to have its cake and eat it too, ensuring that anyone buying a phone from them also signs up or has some sort of wireless plan with the company (which of course they can do at a minimum and cancel after a month).

This may put a damper on the $199 news for some - but existing iPhone users who have been dying for the new technology are likely dancing for joy.

About the author:
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Clint Deboer was terminated from Audioholics for misconduct on April 4th, 2014. He no longer represents Audioholics in any fashion.

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Clint DeBoer posts on July 03, 2008 10:00
I stand corrected. I hate AT&T, lol.

Most of their documentation in print (ie my research) talks about upgrade pricing per eligibility, but the existing iPhone users do indeed seem to be excluded if they purchased before July 11.

I updated it to reflect the difference between upgrade eligible users and existing iPhone users.
Clint DeBoer posts on July 03, 2008 09:54
It certainly is well publicized. It's all in black and white here:

http://www.wireless.att.com/cell-phone-service/specials/iphone-info.jsp

Per the AT&T page:

“If you are upgrade eligible…”

For those who just bought an iPhone before this announcement (and are subsequently already under a 2-year contract, but not far into it) they will have to wait until they are upgrade eligible.

Here are the rules for upgrade eligibility:

http://www.wirefly.com/upgrades/eligibility/att/

Of note:

Not all Cingular/AT&T customers may qualify for a cell phone upgrade. At this time, AT&T Mobility allows these customers to upgrade with no upgrade fee when they commit to a new 2-year contract:

  • AT&T customers who have had 24 months of cell phone service since activation of their cell phone or since their last phone upgrade.
Certain AT&T customers may be eligible for a cell phone upgrade even if they have been in their current plan for less than two years (24 months), if they commit to a new 2-year contract and meet these eligibility requirements:

  • Customer has had a standard calling plan plus data services costing at least $68.99 a month but no more than $98.99 a month, and who has been in contract (and not had a phone upgrade) for 21 months or more,

    or

  • Customer has had a standard calling plan plus data services costing $99 a month or more, and who has been in contract (and not upgraded) in the last 12 months.
A customer with a calling plan and data services of less than $69 who is 21 to 23 months into contract may upgrade for a fee and a commitment of an additional two-year service contract extension. No upgrade fee is assessed for any customers who are on a month-to-month agreement.

Note that AT&T upgrade eligibility may be further limited based on customer’s usage history, payment record, previous phone replacement, etc. Upgrade eligibility is solely determined by AT&T Mobility at its discretion.


I wrote this article PRECISELY because some would think that anyone could upgrade for $199 at any time. It's basically limited to new subscribers or those well into their contracts.

Here is a video on it: http://www.att.com/gen/press-room?pid=6158&cat=32&u=621
FatStrat85 posts on July 03, 2008 09:24
Clint DeBoer, post: 429649
I just thought it was notable that it's $199 for new subscribers only (or those out of contract). For anyone who bought one already an upgrade will cost full $599 or $699.

That's not correct at all, Clint. If you are upgrading from an old iPhone, you can get it for $199. If you are not with AT&T at all yet, you can get it for $199. If you currently have a different phone with AT&T, you can switch over to the iPhone for $199 so long as you're eligible for an upgrade. The only people who can't get the $199 price are people with other phones with AT&T who are not eligible for an upgrade. This is well publicized.
Clint DeBoer posts on July 03, 2008 09:17
Edit: Incorrect info - article updated to reflect the exclusion that AT&T has given existing iPhone owners/subscribers.

I just thought it was notable that it's $199 for new subscribers only (or those out of contract). For anyone who bought one already an upgrade will cost full $599 or $699.

I actually know people who were selling their iPhones on eBay after the announcement because they figured they could buy a new one at $199. Apple didn't exactly make a big deal out of the subsidized part (and consequently the limitations) during its debut.

Additionally, if you read the fine print you can't just pick up a phone for $599, you must subscribe to some service with AT&T wireless as well… just not a contract.

Overall it's no big deal, but some may have thought that the new price was $199 and that if they opened an account 6 months ago they can just trade up - that's not the case.
mike c posts on July 02, 2008 23:27
Matt34, post: 429358
Darn it, I read the title and thought I was going to have to ban Admin for spam.

me too! good thing there's no instant ban button next to the admin's name
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