iPhone 3GS Upgrade Policy

[Anonymous]

Interesting that so many "non-iPhone" customers are so keen to have their say - all a result of iPhone envy if you ask me!

Now onto the real issues...

Needless to say I'm outraged at O2's current policy. I completely understand the issues of subsidized handsets etc. and recouping the cost of the handset through the monthly charges, but O2's responses via their official twitter feed have only led to enflame the situation.

Point 1: O2 have stated that the reason iPhone 2G customers (of which I was one) were able to upgrade to 3G without a contract buy-out was because the 2G was not subsidized. Now just a reminder that the 2G was on sale for £279 (With inc@ 17.5%) on an 18 month contract. Now the 3GS is for sale at £274 (With VAT @ 15%) on an 18 month contract. So it follows that the 3GS is, like the 2G, not subsidized. I therefore put it to O2 via twitter that surely by this logic, 3GS customers would be able to upgrade to iPhone 4 this time next year, without a contract buy-out. O2's response read..."The 3GS is heavily subsidized by O2." When i pressed for more answers regarding this, my questions were conveniently ignored, despite questions either side of mine being answered! Clearly O2's "Masters of Twit" were stumped by this point!

Are we really to believe that the cost price of the iPhone 3GS to O2 is so much more than the cost price of the iPhone 2G?? So much that £279 for 2G = not subsidized, but £274 for 3GS = not just subsidized, but HEAVILY subsidized??

It appears to me that O2 have quite simply blown the bank to retain iPhone exclusivity and they are passing this on directly to it's customers.

Point 2: Name one other phone that carries a £200+ price tag on an 18/24 month contract? In fact, name one other phone that carries any kind of substantial price tag on such a long contract? There are none!! Thus it's clear: the iPhone is not simply another mobile phone! The price/contract situation is completely unparalleled so to now attempt to impose a blanket upgrade policy, saying that all O2 contracts adhere to the same rules smacks of moving the goalposts!

Point 3: AT&T are allowing iPhone 3G customers to upgrade without buyout once the reach the 12 month point of their current contract. Seems perfectly reasonable to me! O2 have certainly recouped plenty of their subsidy and then some from me over the last 12 months. Given that I'd be paying full price for the handset (£274), then none of my monthly payments over the next 6 months will be going to cover subsidy on the 3GS, because as stated above - it can not possibly be subsidized at that price! Therefore my payments over the next 6 months will still be paying back the subsidy on my 3G! Then in 12 months time, a non-buy-out upgrade to iPhone 4 where I am required to pay for the handset would again be perfectly reasonable! Many will state these 18 month contracts and then in essence 12 month contracts, however, this is not true. Such a model will ensure that O2 keep hold of customers as long as these customers keep coming back for the next iPhone. If I were to decide in 12 months that I don't want iPhone 4, I would still have to honour that final 6 months of the contract.

I suspect that O2 have filed accounts and given reports to shareholders etc that the acquisition cost of 3G customers last year will be absorbed over the next 18 months and this is what they're sticking to. As explained above, however, by O2's own admission the 2G at £279 was not subsidized, so therefore the 3GS at £274 must not be subsidized - unless there have been an inexplicable jump in the cost price of the iPhone to O2! So therefore, the next 6 month's payments would continue to pay back the subsidy on the 3G handset!


I'm sure that these points will not be addressed in any detail by O2 and some sort of blanket answer like I got earlier today with be the extent of their response, but I thought it pertinent to express this to fellow iPhone users in a similar position.

In closing, don't be lonely on launch day O2! Though there will be some hardcore fans who will begrudgingly pay the £450 to pay themselves out and buy the new handset, there will be an enormous amount of 3G users who will be unwilling to pay this enormous amount, especially now that they realise that in 12 month's time, another similarly enormous figure will be awaiting them! For the same reason, I suspect that a number of new customers will also be discouraged from taking on the iPhone 3GS, knowing that in 12 months time, they will be faced will this same debacle and enormous fee all over again!

I eagerly await a detailed response from O2.

[Anonymous]

Maybe the other issue here is this:-

If the 2G was not subsidised at all. I've been paying £35 a month for 2 years, with only one Iphone that needed subsidising, the 3G, so O2 are saying that the 2 years we have put in haven't yet payed for the reduced price of the 3G?

The 3G was a bone, they threw out and we, stupidly took it, thinking it set a precedent for future releases. Whatever the case it was wrong to let us assume that. And to tell us last year that "yes an upgrade path will be available throughout the Iphones life" as they told me in store last year.

[Anonymous]

Guy n Gals,

Its real simple, you can moan all you want about the iphone price, or O2's pricing strategy on the iphone but the fact remains O2 are not just going to give iphones away at a loss? They cost what they cost at the minute and if you want 1 just pay the price, if not dont! but for gods sake quit moaning about it!!

Looks like iphones are upgrading every 12 months, and with people signing 18-24 month deals just to get 1 this topic is going to be an annual 1.

I'll be buying the 3gs, just like I bought the 3g on O2 PAYG.

[Anonymous]

To claim that the CEO of O2 didn't know about a new Iphone a week before release is absurd. O2 management would have been aware for months, if not longer.
.

Not at all absurd. It completely explains the utter chaos in O2 between Apple announcement and O2's UK launch of their products. It has happened on both previous launches and will happen on this.
I don't think people realize just how well developed the Apple secrecy machine is. One day a book will be written which shows it rivals many of the classical secrecy regimes in the old communist world.

[Anonymous]

Guy n Gals,
Its real simple, you can moan all you want about the iphone price, or O2's pricing strategy on the iphone but the fact remains O2 are not just going to give iphones away at a loss? They cost what they cost at the minute and if you want 1 just pay the price, if not dont! but for gods sake quit moaning about it!!
Looks like iphones are upgrading every 12 months, and with people signing 18-24 month deals just to get 1 this topic is going to be an annual 1.
I'll be buying the 3gs, just like I bought the 3g on O2 PAYG.

Well said that man. I have a contract 3G and am in the same boat as all these moaners. I will therefore be shelling out for a new PAYG model - and I won't begrudge a penny of the £538. It's the cost of early adoption, noone is being forced to buy it.

[Anonymous]

gotta say this,i purchased my 3g 16 gig about 5 weeks ago if that,if i was to have been told that a newer faster iphone was out in around a months time i would have waited,thats pretty simple,i understand i still have a iphone which is gonna be 3.0 but your never gonna change the fact the specs on the 3gs are better and faster,i feel shafted !!!!

[Anonymous]

After the WWDC keynote speech, I was one of the moaners. Having had some time to think about, I've decided to wait until next year as it's more than likely Apple will release another, even better iPhone. I've already got a 3G so I won't be missing out on that much - do I really need voice control (I've got a voice dialing app and Google mobile), compass (I don't normally go out into the middle of nowhere), a better camera and video (I much prefer my digital SLR and HDD video camera for quality shooting). What I really need is money to pay my bills so thanks O2, you've saved me a ton of cash this year although next year might be a different story

[Anonymous]

some good points there lol

[Anonymous]

gotta say this,i purchased my 3g 16 gig about 5 weeks ago if that,if i was to have been told that a newer faster iphone was out in around a months time i would have waited

Everyone in the tech world knew there would be a new iPhone after WWDC. It wasn't a secret. No one knew what it would feature or look like, but we all knew it was likely to appear. Having said that, speculation as to what it would contain was on the whole fairly spot on. So, word of advice : Apple tend to release things periodically and generally release things at WWDC in June and towards the "back to school" and Christmas holidays. The iPhone is on a 12 month rotation so far - so WWDC is the place to look out for. Never, never buy an Apple product without looking at the Apple rumour sites.

[Anonymous]

Interesting that so many "non-iPhone" customers are so keen to have their say - all a result of iPhone envy if you ask me!

Sounds like iphone arrogance to me :womanindifferent:

Point 1: O2 have stated that the reason iPhone 2G customers (of which I was one) were able to upgrade to 3G without a contract buy-out was because the 2G was not subsidized. Now just a reminder that the 2G was on sale for £279 (With inc@ 17.5%) on an 18 month contract. Now the 3GS is for sale at £274 (With VAT @ 15%) on an 18 month contract. So it follows that the 3GS is, like the 2G, not subsidized. I therefore put it to O2 via twitter that surely by this logic, 3GS customers would be able to upgrade to iPhone 4 this time next year, without a contract buy-out. O2's response read..."The 3GS is heavily subsidized by O2." When i pressed for more answers regarding this, my questions were conveniently ignored, despite questions either side of mine being answered! Clearly O2's "Masters of Twit" were stumped by this point!

Here you've just stated useless facts that are quite frankly unfounded. Without any internal knowledge of what o2 paid for the 2G and will be paying for the 3gs you cannot claim you have "stumped" o2.

It appears to me that O2 have quite simply blown the bank to retain iPhone exclusivity and they are passing this on directly to it's customers.

Good point, I totally agree with you here. Although, isn't that what a business is meant to do? Make a profit?

Point 2: Name one other phone that carries a £200+ price tag on an 18/24 month contract? In fact, name one other phone that carries any kind of substantial price tag on such a long contract? There are none!! Thus it's clear: the iPhone is not simply another mobile phone! The price/contract situation is completely unparalleled so to now attempt to impose a blanket upgrade policy, saying that all O2 contracts adhere to the same rules smacks of moving the goalposts!

Are you suggesting that the most expensive phone should come with magical contract breaking powers? Sorry, that's a little patronising but it sounds like you want o2 to move the goalposts for the iphone (the clue is in the name, it's first and foremost a PHONE).

Point 3: AT&T are allowing iPhone 3G customers to upgrade without buyout once the reach the 12 month point of their current contract. Seems perfectly reasonable to me! O2 have certainly recouped plenty of their subsidy and then some from me over the last 12 months. Given that I'd be paying full price for the handset (£274), then none of my monthly payments over the next 6 months will be going to cover subsidy on the 3GS, because as stated above - it can not possibly be subsidized at that price! Therefore my payments over the next 6 months will still be paying back the subsidy on my 3G! Then in 12 months time, a non-buy-out upgrade to iPhone 4 where I am required to pay for the handset would again be perfectly reasonable! Many will state these 18 month contracts and then in essence 12 month contracts, however, this is not true. Such a model will ensure that O2 keep hold of customers as long as these customers keep coming back for the next iPhone. If I were to decide in 12 months that I don't want iPhone 4, I would still have to honour that final 6 months of the contract.

Too many assumtions. We can't assume that a new iphone will be released next summer, we can't assume that o2, a network in the UK, will be willing to treat their customers the same as AT&T, a network in the USA and we really can't assume that the 'full price' for the 3GS is £274, check the apple website, I think it may be more.

In closing, don't be lonely on launch day O2! Though there will be some hardcore fans who will begrudgingly pay the £450 to pay themselves out and buy the new handset, there will be an enormous amount of 3G users who will be unwilling to pay this enormous amount, especially now that they realise that in 12 month's time, another similarly enormous figure will be awaiting them! For the same reason, I suspect that a number of new customers will also be discouraged from taking on the iPhone 3GS, knowing that in 12 months time, they will be faced will this same debacle and enormous fee all over again!

They will never be lonely, how many iphone users on contract do they have already?

I understand your frustration, believe me I would love a free upgrade to the 3GS, but when we signed our contracts for the 3G, we knew, or at least some of us did, how long the contract length was. O2 were very kind with the 3G upgrade. It would be a shame if this act of generosity in an area of business usually not so was to come back to haunt them.