One Reason Not To Upgrade To An iPhone 3G.

I am not upgrading to an iPhone 3G at this time. The reason for this is one I haven’t seen mentioned before, so I’ll mention it for others to consider if they haven’t already.

First, I have numerous reasons to upgrade:

  • I live smack dab in the middle of AT&T 3G country; I would get great benefit from the faster speed.
  • I long for GPS turn-by-turn directions, which I’m convinced are coming within six months.
  • I use the speaker phone all the time, so the improved audio would be appreciated.
  • My phone is already full, the additional 8GB would be great.
  • I could sell the old iPhone to fund a lot of the purchase price.

So with all the reasons above why am I avoiding the upgrade? Well, the fact is us original iPhone owners get one “free pass” shot at a subsidized iPhone before we have to wait ~18 months for another one.

In short, if I get a subsidized 3G phone now, then I cannot get another one subsidized for perhaps 18 months (based on AT&T eligibility requirements). That’s a long time in the iPhone world, and I’d rather save my one free pass for a bit more improvement.

For example, I think this Fall when Apple does their annual iPod revamp for the holiday season, there’s a reasonable chance a 32GB iPhone will be available. As someone with over 70GB of stuff (and growing) in iTunes that’s a lot of extra memory I can use.

Also, while I doubt we’ll see any iPhone hardware changes this year beyond extra memory, it may very well be that at next year’s MacWorld the next iPhone will be announced. If so, it may be weeks or months from availability, but at least I’d know what it is and can plan my next upgrade accordingly.

Right now, with an unsubsidized iPhone, I can walk in and get a new iPhone at the subsidized price any time I want. I don’t want to blow that free pass on the first pretty iPhone I see. If I got one today and in three months there was a 32GB version, and in six months a new model announced — both not unrealistic possibilities — I’d be kicking myself for not being a little more patient.

Understand this isn’t about waiting for something better — there’s always something better coming — but rather being wise about the best use of my “free pass” at a subsidized iPhone price.

7 thoughts on “One Reason Not To Upgrade To An iPhone 3G.

  1. What I’m saying is that you will have to extend your contract – it honestly depends on what AT&T branch you go to. Nicer employees are flexible. Managers at AT&T stores can give you WHATEVER they want to to keep you as a customer. They want to keep iPhone customers because they show up in the system as paying $75 or more a month – a sweet spot for retention. If you are paying over $100 a month – they will practically throw in a striptease for you.

    You are “upgrade evaluate eligible at 1 year” – you are upgrade eligible at 2 years.

    I just made an exception for a customer yesterday.

  2. Doug,

    It’s not about how long I’ve owned the current generation, but rather how long I’ll have to own the next generation when I buy it (probably 18 months).

    Since I’ll have to own it for 18 months do I really want it just to be the relatively minor hardware upgrade represented by the new 3G? I’d rather hold out at least for a memory bump, and at that time I’d feel better about getting a phone I won’t be able to upgrade inexpensively for a year and a half.

  3. Look at it how ever you want but if you don’t use your “free pass” in the next 6 months did you really get a free pass? In 6 months you would have owned the 1.0 iPhone 18 Months and be eligible anyway. Personally I’m guessing the only upgrade we will see is a memory bump 6 months from now (maybe). That means you have to put up with 8GB for 6 months instead of 16. Sure, the 32 will be out soon enough but you have already stated that 32 is not enough for you anyway. So, a year after that the 64 will probably ship and by then there will probably be some major hardware changes as well (camera, screen, who knows). If you buy now, you will be ready for that upgrade 2 christmases from now, but if you wait you will have to hold off another 6 months.

  4. Rus,

    You sound closer to this than I am, so maybe I’m all wet, but what you say seems like a money loser to AT&T.

    Let’s say I buy a Blackberry today from AT&T for $199 and 2-year contract. AT&T has subsidized $200 or more of that phone. Six months from now, a new iPhone comes out and I want to swap out my BB and get the low subsidized iPhone price. AT&T wouldn’t allow that today because, only six months into a heavily subsidized phone, I’m not “upgrade eligible”.

    In my view, substitute a $199 iPhone 3G for the BB above and the same holds true.

    At only six months with your old phone, if they extend the contract to two years and give you subsidized pricing on the new phone they won’t get their subsidy back on the old one (they didn’t get back $200 in only six months).

    The rules for non-iPhone owners to get subsidized pricing on the 3G were pretty clear, and generally speaking no one not ~18 months into a subsidized contract was getting one for $199. I think current iPhone owners were all “upgrade eligible” simply because the phone was never subsidized in the first place, but that won’t be true of 3G owners when the next iPhone comes along. I’m sure there may be exceptions. Perhaps as a 17-year customer you’re an AT&T exception, and other companies (like Sprint’s SERO) can offer some great deals to their customers, but most people don’t get that kind of treatment.

    I would LOVE to see AT&T always provide current iPhone owners special upgrade options to new iPhones that other subsidized smartphone owners do not get. Heck, it’d be another great feature of the iPhone that helps to future-proof it. Is AT&T smart enough to do that? Beats me.

  5. Tom …

    I’m temping with AT&T for the iPhone launch. I think your confused about how the subsidy works. Verizon works the way you are stating … AT&T will just extend your contract and let you get the subsidized pricing. Now, this excludes free phones – higher end phones. Could the iPhone be FREE next go around? Maybe … but I doubt it.

    I’m with your first poster in that AT&T will most likely provide an upgrade path for next gen iPhone buyers – even if that possibly means turning your old phone in – again I doubt it.

    Most of the times when I’ve been on contract for a subsidized phone though they’ve seen that I’ve been with AT&T (formerly Cingular, formerly BellSouth Mobility) for 17 years – they can see that I’m not going anywhere and give me the new phone for the subsidized price and include the time I’ve already used under the previous contract subsidy.

  6. Joshua,

    All first generation iPhone owners were eligible for the subsidized pricing. Yes, this does refer to phones on an AT&T contract, but any first gen iPhone in the USA not on an AT&T contract is “illegal” anyway. If AT&T won’t allow you to upgrade an unlocked iPhone at the low price (and I don’t know this) I can’t say I blame them.

    No way AT&T offers this for every iPhone upgrade. I think some people maybe believe it’s offered now because AT&T is being nice, or Apple is mandating it. No way. It’s being offered now because the original iPhone was not subsidized, so AT&T has no money in the game they need to get back. And they’ll gladly tear up your current contract for a more expensive and fresh 2-year new one.

    With the new 3G, AT&T is kicking in at least $200 (maybe more) and, just as with any other phone they subsidize, you will have to use it for quite a while before they subsidize another one for you. If a new iPhone comes out in January I would be shocked if AT&T offered the “full” subsidized price on that new model for 3G owners.

  7. I totally see your point about the storage increase…. that will happen for sure. However, many iPhone owners weren’t “eligible” for the upgrade, AT&T-wise, but all us original iPhone owners get the lowest price anyway because we are current iPhone owners. I would be surprised if AT&T didn’t always offer that every new major hardware change (likely every June/July). So, even though getting a subsidized iPhone now will reset your eligibility for every other AT&T phone, I think it will always be special circumstances for iPhone owners in that they will always get the lowest subsidized price.

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