Will AT&T burn you with the new iPhone? : Texxors.com

Will AT&T burn you with the new iPhone?

June 19, 2008 Posted by Bryan in : Apple, New Products, PDAs/Smartphones , trackback, Email this post

Are you one of the loyal AT&T customers who will have to pay full price to upgrade to the new version of the iPhone?

The jaw-droppingly low, AT&T subsidized rate for the newest iteration of the iPhone was one of the biggest announcements of Job’s keynote speech at Apple’s WWDC. But don’t get caught up in the hype. $199 is a great price for an 8 gig iPhone, but a whole lot of people won’t be able to get it. Ironically, this group is the one you would expect AT&T would least like to ostracize - their loyal customers.

In a discussion with an AT&T representative yesterday we confirmed that the $199 (8gb) and $299 (16gb) prices are only for new customers or customers eligible to upgrade based on their time in contract. A large group of people who recently upgraded are going to be out of luck.

The first version of the iPhone was clearly a product for early adopters who were willing to pay a premium for the new, cool gadget. In terms of market targeting, this version *should* be the version for the mass adopters - and the price suggests they are ready to target that group. But the usefulness of such a price drop is lost when a majority of potential purchasers will have to pay full price. By making this offer unavailable to the current AT&T masses AT&T has effectively reduced it’s target base to the three people in the US who don’t already have a cell phone and the small percentage of people who are available to upgrade at release.