Is the cost of upgrading to iPhone 3GS too high?
By Michael W. Jones
The new Apple iPhone 3GS poses some problems for people that already have an iPhone but are thinking about upgrading to the new model; the problems are mainly based around cost.
There are a lot of reasons for users to upgrade from the iPhone 3G to the new 3GS, but the cost may be an overriding reason not to for many users. Obviously, new users get more speed (that is after all what the “S” in “3GS” stands for), more memory (twice as much in the new model than on the old model), that nifty new compass feature that the 3G didn’t have, a much-improved camera (1 megapixel better, plus video capabilities), and a number of other lesser improvements.
Everybody, by the way, can get the new iPhone OS 3.0, so that is not really much of a factor. There is support in the new operating system for the new 3GS features, but most of the improvements available in OS 3.0 will be available to users of the previous generation phone, according to an Information Week story. The new operating system is sort of a break-even, whichever way you decide to go.
However, the cost penalties of the upgrade will be simply too great for a lot of current iPhone 3G users to stomach. If you already have an AT&T contract and an iPhone 3G, the upgrade situation is going to feel a lot like bank robbery, where you are the bank. I know that Apple talked about $199 and $299 pricing for the new phones in the introduction at the World Wide Developer’s Conference, but for most current users that just isn’t true.
Those prices are only for new customers moving from some other platform to the iPhone. If your current contract is not up (and few of them will be) the new 3GS is going to set you back a piece of change. If we understand properly, the prices for that (very large) group of users is exactly $200 higher: $399 for a 16GB 3GS and $499 for a 32GB model, plus a small contract change of about $20. That is some serious money for a cell phone.
Unless either Apple or AT&T makes rebate or price reduction provisions for users stuck in this bind, the 3GS is probably not worth the upgrade cost, especially in this economy. Sure, if you’re moving from an end-of-contract Motorola Razr at Verizon, it’s no big deal; you get the lower price. For the majority of current iPhone users, though, the upgrade cost forces them out of the 3GS market.
That is going to change some projections for iPhone sales, which almost certainly did not take this conundrum into consideration. Yes, there will be more users converting to the iPhone, and thus more sales, though many of them will be to the 8GB 3G for $99. Many millions of people already have a fairly new iPhone, and they will not be changing at these prices. That is going to cut down the revenue sufficiently, and may even be enough for stock price analysts to revise both their estimates of revenue and their high opinions of the likely performance of Apple’s stock.
If you have a 3G, it’s probably best that you keep it, unless you drive a Ferrari or a Rolls. There’s a lot of resentment about this policy, so Apple and / or AT&T might eventually decide to cut you a deal on an upgrade. If they decide not to offer you any relief, you are probably better off to wait until the iPhone that will be introduced in June of 2010; it will probably be even shinier than the 3GS and you’ll be able to get the lower price on that one.
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Stumble It!
June 10th, 2009
You’re damn right it is! WTF is the deal there, with AT&T screwing its existing customer base?
June 11th, 2009
I have the cash, not the Ferrari, but enough is enough. Not only would I have to pay a premium for the phone, but I’d have to pay a higher rate for the data plan, a higher rate for text messages, and be locked into AT&T for another 2 years.
I love the ease of use of Apple products, and upgrade my computers often, kicking the old laptops down to the family (my 8 year old has her very own black macBook, my s/o a macBook Air).
I could afford to upgrade as my father’s day gift to myself, but until consumers start behaving reasonably, this price gouging will continue. So I won’t be upgrading until…sigh… 03/13/10.. as that’s only 3 months before the next iPhone release, it’s unlikely that I’ll have a 3GS at all.
Stings.
June 12th, 2009
“There are a lot of reasons for users to upgrade from the iPhone 3G to the new 3GS”
Horse-crap there is. You people DO realize 2 days prior to the 3GS there is the 3.0 Firmware update correct? You also realize that MOST of these fancy “new” features in the 3GS WILL be given to 3G users via the update, which is Free, correct? This faster speed isnt exclusive to 3GS because of the “S” like you claim, it’s part of the 3.0 firmware update which again, is free.
The ONLY things the 3GS will have over the 3G is a 3.0 Megapixel Camera, Video Recording, a Compass and Voice Dialing. That is all.
Now is a 1.5 Megapixel increase, video recording, a compass and voice dialing worth an extra 300 to 600 bucks? Hell no it isn’t. I can spend 100 bucks on a good digital camera thats 12 megapixel with video recording. It’s absurd.
For one the new update means that apps can be developed to give you voice dialing and a compass. If you REALLY want video recording, guess what, then jailbreak the 3G and unlock the already present interface for video recording.
Also your prices are wrong. I went through the apple store AND AT&T store and for current AT&T users the prices for the 16GB and 32GB 3GS are $499 and $599 WITH a 2 year contract. If you want a phone without a contract it is $699 and $799 for the phones.
June 12th, 2009
And I meant the prices are 599 and 699 for the new phones for existing customers and 799 and 899 without contract. if your going to write and article do research.
Below on apples store site:
“(1) 1GB = 1 billion bytes; actual formatted capacity less. (2) Requires new two-year AT&T wireless service contract, sold separately to qualified customers; credit check required; must be 18 or older. For non-qualified customers, including existing AT&T customers who want to upgrade from another phone or replace an iPhone 3G, the price with a new two-year agreement is $599 (16GB), or $699 (32GB).”