For those of us who bought the 1st generation iPhone and the iPhone 3G right when they came out, we do it partly because we want to be a part of the hype. We want to be first! We want all the excitement! Now, we’re being told we have to pay an additional $200 to be a part of the hype, to be first, to have the excitement! We’re the reason the iPhone has been so successful! We’re the ones that are reported in the media as waiting hours and days before the stores open! We’re what make you, AT&T and Apple, successful!
Don’t get me wrong, I understand that the iPhone 3G was subsidized by AT&T. I understand that when we paid for the device that AT&T was kicking money to Apple as well and expecting to recover the money by our monthly payments for the majority of our contracts. HOWEVER….AT&T is allowing some customers to be eligible for the full upgrade pricing in July, some in December, some in January, and some in March. What’s with the inconsistency? We’ve heard grumblings of a reason behind this inconsistency. It has to do with the amount left on the contract, how much we pay per month, the type of plan (individual or family)….blah, blah, blah. These are just that, rumblings, though. No official word from AT&T as to rhyme or reason! Plus, when customers call in asking why their upgrade date is what it is, they are each being told something different. It has to do with how many night and weekend minutes you use, how many mobile-to-mobile, etc, etc, which essentially means, it has to do with how much money you cost AT&T with the “free” features. What! Get your story straight!
If AT&T and Apple had been straightforward with their customers in the beginning about what would qualify them for full upgrade pricing in about a year, then more than likely, all us early adopters would add the extra text messages to our plan to meet the requirements, or do whatever it took to jump through the hoops.
I want to be clear with the intent of this letter. I’m pointing a finger at BOTH AT&T AND Apple! I’m a very, very loyal Apple consumer. I’ve brought them a lot of business and referrals. However, I find it hard to believe that they are not aware of what’s going on here. Did they honestly expect that loyal, early adopters would be okay with paying $200 more or waiting God only knows how many months? They chose to contract with AT&T (an entirely other rant that I won’t get started on right now). So, it’s partly their responsibility to work with them to make sure their loyal customers win out! There are those who say that Apple iPhone customers should not get special treatment when it comes to cell phone contracts and upgrade policies. However, if AT&T and Apple had been up front about the upgrade policy a year ago, they would not have so many upset loyal customers!
Plus, I do believe that repeat iPhone customers should be treated with special regard! I want AT&T to keep in mind that we have made them a huge amount of money and dramatically increased their customer base. There is a large majority of AT&T iPhone customers who never would have signed up with AT&T if it had not been for the iPhone. Many of us are disgusted by how AT&T takes us for granted! Also, there is no other device that has received so much publicity and loyal following!
So, what should AT&T and Apple do?
- Revise the existing upgrade policy to allow every current iPhone customer who bought the iPhone 3G within a couple of months of its release to upgrade at the full upgrade discount via pre-order or in person on launch day, June 19th!
- Clearly state the upgrade policy so next year, there are no surprises! If Apple plans on yearly releases of the iPhone, then this needs to be taken into consideration with the upgrade policy so early adopters may continue to be eligible at launch.
Now, what should us loyal Apple iPhone customers do if we’re not eligible for the full discount price on launch day?
- Call, email, and visit AT&T and Apple making your complaints known!
- Post messages online on blogs, forums, Facebook, MySpace, Twitter, etc. Plus, post your correspondence with AT&T and Apple along with their responses.
- Don’t cave and buy the iPhone 3GS on launch day at the higher price!
- Encourage all who plan on buying the new iPhone to NOT go on launch day! AT&T and Apple are expecting huge lines like the prior years. Show them that those of us who previous waited in those lines will be greatly missed!
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14 comments:
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I share your pain - I really do. At the same time, I can also see the view from AT&T's side - mainly, will the discount of a $200 iPhone (usually $400) be made up through paying the service contract.
However, then I look at Verizon, which charges $99 for unlimited phone, internet, and texting, then I'm pretty sure that AT&T's charging me $70 for 450 minutes talk time, they're probably making a profit. Or, they should be.
Am I annoyed? Yes. Do I believe I should get a discount? Sure. Or - at least have a trade in program so they can take my old iPhone and use it as a refurbish or something.
But I'm patient.
I agree that for most of us.. We are not experts at wading contracts so we have to rely on sales people trying to sell. Unless you are one of the few that can actually understand the purposely hard to read contracts... U muddle around taking bits of information from different sources.
Shelly, if you look at AT&T's SEC filings, you'll see that it costs them about 75% of what they make to operate and expand their network.
My monthly AT&T bill is $89.
If 75% of that goes towards operations, that leaves $22.25 of "profit".
AT&T gave me a $400 subsidy when I bought my iPhone 3G.
If I divide $400 by the $22.25 a month of profit I make them, I see that I need to be in my contract for 17 months until I've made them enough profit to pay off the $400 subsidy they gave me.
If I paid more per month, you can surely see how the number of months goes down (and how some people get a subsidy sooner than others).
As much as it sucks, it makes no business sense for AT&T to just "forgive" people in contracts where they haven't earned back the subsidy money yet. Those people made NO MONEY for AT&T.
Regarding how much money AT&T lost in subsiding the iPhone 3Gs in 2008, and when they expected to "make money" from the deal (2010).
http://www.att.com/gen/press-room?pid=4800&cdvn=news&newsarticleid=25791
"In the near term, AT&T anticipates that the new agreement will likely result in some pressure on margins and earnings, reflecting the costs of subsidized device pricing, which, in turn, is expected to drive increased subscriber volumes. The company anticipates potential dilution to earnings per share (EPS) from this initiative in the $0.10 to $0.12 range this year and next, with a 2008 adjusted consolidated operating income margin of approximately 24 percent and a full-year 2008 wireless OIBDA margin in the 39-40 percent range. As recurring revenue streams build without any further revenue sharing required, AT&T expects the initiative to turn accretive in 2010."
Anonymous,
There is an extremely wide range of eligibility dates being assigned to loyal customers. There is no official word on what determines these dates and there are many stories being told to "explain" this. As I mentioned in my post, I understand subsidies, but I have no patience for a company not being clear on their policies!
I couldn't agree more! People should not line up at the doors this time around to get the iPhone.
I have been trying to explain to people ALL DAY that this is really not about the contract and it really has nothing to do with AT&T. It all points to APPLE; who purposely released a smart phone with "sub-par" technology and by that I mean, the 1st Gen was released without 3G, initially it was released without the capacity to even group text for christ's sake, till this day you still can't even send a simple MMS message (3.0 upgrade next week).
So, to me the point is, these iPhones that are now being released contain technology that APPLE deceitfully held on to when other cell phone manufacturers are shipping this technology on phones that costs WAY LESS than iPhones. It's BS.
People who are not loyal iPhone users do not understand this. They don't understand that we purchased these phones knowing full-well that we could not have insurance on the phones, so if we were to lose it or break we pay full retail... how many Blackberry users have this problem?
My problem is not so much with AT&T as it is with APPLE and they definitely need to hear from us. Price gouging and holding on to technology until the release of another generation of phone is ABSOLUTELY UNEXCEPTABLE!
I personally have NO DESIRE to purchase the new iPhone, even before all of this banter began because having video is simply not that important to me but I will be an added voice where needed because this is ludicrous!
We need to make sure all of these a*holes understand that our gripe is not with the contract, because we are not morons and we understand the terms and conditions of signing documents in agreement with the return of something else. We are pissed that technology has been deceitfully held on to with the intention of making more money year after year after year. BASIC TECHNOLOGY FOUND ON CRAP PHONES!
I'm with you! Let me know where to go, what to sign and what chat boards to be on and I'm there.
VIVA LA RESISTANCE!
I don't think AT&T posts a "how-to" or tutorial about how they calculate their average revenue per user (ARPU), nor are they required to advise people on how to obtain the quickest upgrades. Generally speaking, your upgrades will be quicker the more you spend. People of your ilk are the worst of both worlds - the wireless customers who believe that they should be able to upgrade whenever they want, and the entitled Apple fanboy (or in this case, fangirl) who believes that, because you've bought a company's products repeatedly, that you deserve a special prize for going to the same well over & over again. When you bought your iPhone 3G, you purchased a subsidized phone, unlike what happened with the original iPhone. You signed a two-year contract in exchange for that subsidy. If AT&T elects to take user profitability metrics into account when shortening the window of time until the user is eligible for another upgrade, that's entirely their prerogative. Really, grow up. There are bigger problems in the world than your inability to buy an iPhone 3G(S) the first day it's released.
AT&T is a big rip-off and it is sad to see Apple align themselves with a company which treats good loyal customers like garbage. I have been a loyal customer from back in the cingular days and since they changed to AT&T they have really gone downhill. I have a plan that is so old that their system doesn't even have codes for. They take off features and do things that end up costing me more without notifying me. I am on auto pay and I have a perfect paying record, and yet I have to call and fight almost every other month to get them to fix things that they change without my permission. They have suggested that I change phones and NOT use the Apple I-Phone! What NERVE! Come on Apple, open your eyes. It is pretty bad when your customers are more LOYAL then your business partner.
I bought the 1st generation iPhone on June 29, 2007. My contract expires on June 29, 2009. I have been late on my phone bill a few times and paid the $29 reconnection fee. But now to upgrade to the new iPhone 3G S, AT&T say I am not eligible until 9/7/2009 because I have been late in paying my bill. They are telling me that this restriction is from Apple because they put strong restrictions on who can upgrade to the new phone.
I agree, what AT&T needs to realize is that they need to take care of the existing customers or they will no longer be customers we can see by the recent keynote apple is improving the iphone yearly now. What happens AT&T when apple's Iphone becomes open to all carriers. Do you think that your current customer are going to stay with AT&T? By the way your screwing us over right now I can safely say for myself that I wont be staying. Come on AT&T haven't you ever heard the saying "The customer is always right". The Customers are what keeps your business running. With out customers, what are you guy going to do ?
@ black frog , that is ridiculous! apple should not be able to have "restrictions" on when or who buys or upgrades their products!!
I'm actually on AT&T's side on this one. Usually the upgrade protocol is 20 months (you sign onto a 24 month contract... they let you upgrade in 20 months) I've never seen it different except for a few occasions. Well you don't get to upgrade whenever you please, AT&T is having to pay the manufacturer money for the phone's they sell you, and the way for them to get money back is by well keeping you on contract paying every single month. Now if you got a phone at a discounted rate every 2 months AT&T would be losing money since they're having to make up for the price of the phone from the manufacturer. AT&T is a for-profit company it's here to make money from people, as nice as Customer Care and everyone else is the main goal is to get the payment from you every single month and if they can keep you a customer for a longer amount of time, than that's even better, right? Why would AT&T go and lose money by selling you an iPhone at a discounted upgrade rate every single year, its not the way they treat the rest of us.
I'm on ATT's side. Did you really think you could get another phone when you are under contract? Learn to live up to your side of the contract or don't sign it.
If you really want to complain then complain to Apple because they are bleading ATT dry with their deal which they have made ATT dependant on.
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