Friday, June 13, 2008 -- 10 a.m. -- on my couch

When you purchased your first iPhone, you purchased the Apple iPhone. Now, you are purchasing the AT&T iPhone. Read on and you'll find I haven't completely lost my mind. At least not yet.

I have not heard anything official from AT&T yet regarding price plans, but I have been doing a lot of research while I'm waiting, and the news isn't particularly good as far as fees go for the iPhone 3G.

Let me tell you what I've heard, what I think and what I know. Keep in mind, I'm making it very clear that this is not official and is subject to change. But at less than a month until launch, I'm not liking these numbers.

Data
All first-gen iPhone customers paid $20 for their data plan, which included unlimited Web surfing and visual voicemail. There was also 200 text messages thrown in (Note the word WAS). That price was added to a voice plan, of course. In general, the overall monthly bill for what we got wasn't too terrible, at least in my opinion.

Now, things are a little murkier.

In an interview with gigaom, Ralph de la Vega, president and chief executive officer of AT&T Mobility, said that the data plan will cost consumers $30, which includes unlimited 3G data and visual voicemail. I bolded consumers because he also says in that interview that "enterprises will pay $45 a month. This is what you pay us on other PDA devices such as BlackBerry Curve."

So if we're to read that right, it sure sounds like he's saying that if you intend to use your iPhone for work enterprise e-mail that you need to have a business plan, and therefore pay $45 month instead of $30. Tell you what -- you heard it here first -- if that's the case? I will use Web mail for my work e-mail. I refuse to pay AT&T any more money than I already am. I find this to be shady, and that's putting it mildly.

SMS
In that interview with gigaom, and actually in the same sentence, Ralph de la Vega of AT&T says the following: "The SMS messages are not bundled anymore, and you pay for what you want. Again, the prices are based on what you buy.

Ouch. Ouch. Ouch.

Of course, like all other carriers, AT&T has a confusing array of plans for SMS messages, ranging from as little as $5 to as much as $20 for unlimited messages. Point is, if Ralphy boy isn't pulling our chain, it will likely cost us $5 extra a month for something we have now, at the very least. Voice plans, usually, start at $39 and go on up around $100 for unlimited talk time.

Keep in mind, AT&T could still create an iPhone bundle here, but de la Vega was pretty clear that the word of the day is separate, as in separate data, separate SMS, separate voice.

Look at what's happening in other countries. Take the UK for instance, where the price plans for the 3G iPhone from O2 were announced right away. And you know what, they aren't half bad. They aren't half bad at all, and they all come with text messages. They also still allow prepaid plans for the iPhone 3G, where as AT&T has excluded pre-paid plans from the mix this time around.

My goal is not to bash AT&T. ... up until now, it hasn't been so bad. But that was before we were going by the old tried and true subsidized model, which, no matter how tech pundits and wireless insiders spin it, SUCKS. They say the subsidized model works. It does not work. It's the reason I usually have less than nice things to say about the wireless industry.

I wrote a piece about subsidies the other day, and I invite you to refer to that for more information.

But to take a piece from what I wrote over there, I worry a lot about this whole model -- not as much for the iPhone 3G, but certainly for iPhone 3.0.

You know that Steve Jobs and Co. have to release new iPhones often -- they have to keep up with technology and trends and even flash memory. 2 years in the tech world is a lifetime, and yet that's the contract that we have to sign -- 18 months in many European countries and 3 freakin years in Canada.

My worry is well substantiated, I think ... you sign a contract for iPhone 3G on July 11, 2008 which expires July 11, 2010. Steve releases the iPhone with 3G plus, a 5MP camera, videoconferencing and more on July 11, 2009 for $299. And when you can't wait to buy it, AT&T says ... whoa! Not so fast ... you are under contract. You don't qualify for that price. Now perhaps there will be something special planned there -- where current contract-bound users pay more and potentially much more, but I do not think it is beyond the realm of possibility that AT&T would keep thousands upon thousands of folks who want to upgrade from upgrading. My hope there is that Steve and Ralph go head to head in a cage match and that Steve makes the world right, but I think my concern is justified.

Anyhow, let's sum up the issue of 2008 before we deal with 2009 and 2010.

You will pay less up front for your iPhone. And you will pay more per month for the privilege of toting it around. And while I understand that 3G data costs a little more, I do not understand nor do I agree whatsoever with charging a consumer who wants to get his work e-mail immediately an extra $15 a month for the privilege. And I think it's bad business to charge a consumer extra for text messaging. I understand business is business and the end game is about making money, but it's more than that.

We were already told that we'll have to activate our phones before leaving the store, meaning the freedom to sign up in our underwear via iTunes is gone. Although, today, that became a little less clear with some reports stating that while we have to sign a contract in the store, the actual activation may be able to be done in iTunes. More on that when I know for sure, but either way, this seems much less like the Apple iPhone and more like the AT&T iPhone.

There's a big difference.

Please do let me know in the comments what your thoughts are.

And as soon as the official price plans are released, I will let you know with 100 percent certainty.

Thanks for calling.

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My iPhone 1.0 (or 2G or whatever) is looking very good right now. I hope that AT&T will not charge the $5 for text messaging. If they do, I hope I have the option to turn it off. I don't want to have to tell everyone I know to NOT send me texts.

We'll see...

SCOTT'S REPLY: I'd say that if you have to pay for it, then you'll have the option to turn it on or off and not be forced to pay for it. But when I hear unlimited data and voice, I like to think that includes texting. I consider that as basic as voice if not moreso.

I think not having 200 text messages bundled with the data plan is wrong but why shouldn't AT&T be able to charge the same price for the same Enterprise access to e-mail as they do for the Blackberry service. My only problem with that would be if Apple's enterprise mail app is not as complete and effective as the Blackberry's. Then they wouldn't be justified in doing so. You know I agree totally with the notion that going back to the old business model sucks though! Notice that APPL is behaving particularly poorly the last couple days even with NASD behaving well as a whole. Something or things the market doesn't like about this roll out it appears.

SCOTT'S REPLY: It's a fine line. They should be able to charge similar amounts. But ... when you have all this talk from Apple about this great new Enterprise feature and have to get tidbits of information that there may be a premium to use it -- it's shady. I'd like to be made aware of that up front rather than be shocked on the back end. I certainly don't want to deny AT&T the right to conduct business -- and treating everyone the same is usually fair -- but why does it always take so darn long for communication to commence?

Scott:

If I keep my 1st generation iPhone will my rates stay the same?

SCOTT'S REPLY: They should, Jeff, from everything I've heard up until this point.

Hi,

I'm from the UK.

The O2 tarriffs for the new phone are the same as the old iphone.
The only difference to a UK user, is that instead of paying £269 for the 8gb iPhone, you now pay £99 - or free on the top 2 tariffs. Most users in the UK will go for the £35 tariff, with the phone costing £99.
If you go by the old cost of the phone (£269) this means that O2 is now down £170 on the cost of the phone. Is this the same amount they were giving to Apple under the old iPhone, or are they now going to end up making more/less money.

As for the data on AT&T. If you pay the $30 for the consumer data plan, how do they know if your e-mails are personal or for business use. You could be using it for personal use and receive loads of e-mails a day, or be using it for business and only receive a few e-mails. Or if you add an exchange account will they pick up on it and force you to pay the enterprise amount.
I think it's more likely if an individual buys the phone they pay $30 for data, but if it is going onto a business account it will be $45

SCOTT'S REPLY: Hmmm. Interesting point. If it's purchased by a business it could be $45 but $30 for everyone else. I mean, I suppose that if an iPhone is using a ridiculous amount of data that AT&T could check and see if an exchange server is being tapped, but there's no way they are going to check everyone's iPhone. They can ask you to move to a different kind of account if it comes to that, I suppose, but it makes sense for people to just sign up at $30 and take their chances.

I think you've interpreted Ralph's comments correctly, and you've nicely pointed out the gotchas for consumers. And I agree it sucks.

But for balance, it's not totally an iPhone problem; it's a cellphone problem. Note:
1. you can buy an unsubsidized phone to replace your previously subsidized iPhone on the same AT&T contract at any time. In the iPhone 2009 case, we can project that you'd probably have to get the unsubsidized iPhone 2009 overseas.
2. the AT&T plans, contracts and restrictions are no different for any of its other phones.
3. the AT&T plans, contracts, and restrictions don't really differ from any of its US competitors.

SCOTT'S REPLY: Right, Mark. It totally matches every other phone and carrier. And that's understandable. But the iPhone is different. People follow the iPhone. People want a new iPhone because it's an Apple product. I'm there are people who use other brands that look forward to new phones, but it's not the same. And if people have to look overseas to buy a full-priced phone, that's not going to fly either.

I think that as long as AT&T offers some way for me to purchase a new iPhone mid-contract -- even if that phone is full price -- then, that's really all I'm asking for at this point.

So what if we already have an unlimited text plan and nationwide long distance with lots of minutes? Does this mean I will have to cough up more $$$ in addition to my already 170 per month bill? If that's tha case, no iphone for me.

SCOTT'S REPLY: Good question, but we still don't know yet how these things will transfer between plans.

I'm a bit confused about who exactly would purchase an "enterprise" data package. I'm still in school, so maybe this is off-base, but my impression is that if you've got a cellphone for business purposes, isn't your employer usually footing the monthly bill for you? Is it small business owners who would purchase the enterprise plan?

SCOTT'S REPLY: Yes and yes, but then there's the question of someone like me who wants his work e-mail in his pocket with him ... do I need an enterprise package to access my work e-mail when I'm on my couch? That's what we need to find out, but what you state, John, is correct.

OK, I am trying to uderstand what an enterprise user is. When Ralph says "enterprises will pay $45 a month"...dooes that translate to any one who wants to use then new Outlook integration will pay $45 a month"? If so that really really sucks. And will probably keep me from buying an iPhone 3G...for now at least.

SCOTT'S REPLY: Ralph wasn't clear whether that's for someone who wants to take advantage of the feature or a business price. There's a huge difference. Knowing that there's no way for someone to effectively police that, I'm starting to think that's the price businesses pay for the privilege, not the end consumer cost.

According to this site, some of your fears are greatly exaggerated.

http://blogs.zdnet.com/Apple/?p=1843

200 SMS messages will be included with all data plans. If you want unlimited SMS, it's an extra $20, which is a DEcrease from their previous price.

In sum, if one wants a 3G iPhone for the minimum, they can get into it for $199 plus $69.99 per month. I believe that is only $10 per month more than the first gen iPhone minimum plan cost for the same minutes, SMS, but no 3G.

It is not uncommon for enterprise customers to pay more for service, and as has already been pointed out, $45 per month is comparable to what Blackberry service costs.

Bottom line: For a phone of its capabilities, we are not really paying any more than we would for any other device like it. Maybe even less. But since it's Apple, we'll examine every little aspect of it to death because that's what we Apple Geeks do.

It is possible this could be another false alarm similar to the recent "AT&T is going to make me turn in my old iPhone" rumors.

SCOTT'S REPLY: I appreciate your insight and comments, Doug.

But, Jason D. O'Grady took the information from AT&T's site on June 9 and copied it and said it was the 3G price. If he's correct, it's only because he guessed. He's right about the price of the data being $10 more, but even AT&T said on June 9 that prices for voice and the rest of the plans were undecided. So the chances of a $69.99 minimum exist, but they are much more unlikely than mentioned here.

Oh, and $20 has always been the cost for unlimited texting on the iPhone.

And Jason, if you read this ... please let me know if I'm wrong. If you contacted and spoke with an AT&T spokesperson and they specifically told you that the prices you quote are accurate for the upcoming iPhone 3G being released July 11, 2008, then please let me know, but I suspect you have mixed your old and your new.

I read on slashdot.org that if you do not activate your iPhone (hardware v2) in 30 days they will charge you a fee, I'm assuming the balance of the subsidized cost. Users at /. were thinking, that if at&t (after a merge they dropped the caps) charges a fee, the phone is now paid in full and once again, is yours.

If this turns out to be true, then I can walk into the store and say I'm buying the iPhone as a gift and never activate it via at&t.

Typical Greedy American Company. at&t knows they are the only gig in town for an iPhone and they are pulling an oil company scam; charge more, because they can.

So the people on ./ were right, saving you $200 on the phone, charging you at LEAST $240 ($10 x 24 months for the higher data plan then add SMS costs) more for the service.

Ask me again why I don't use at&t?

A PROUD unlocked iPhone owner

SCOTT'S REPLY: Today, AT&T didn't comment when they were asked about the penalties for not signing up, although another interview stated that you absolutely had to sign up with the carrier.

Brian, I would think that unlocked 3G iPhones will someday exist, but I don't think it will be easy and I don't think it will be worth the trouble the way it was last time.

I agree this smells of a sellout by Apple to AT&T. I would hope, and hope being the very large operative here, that since AT&T only subsidizes the iPhone now instead of sharing revenue, Apple in return is allowed sell the iPhone in the US to other carriers. Otherwise, I don't see what Apple gets at all from this deal...unless market share from a single carrier seems that lucrative!

SCOTT'S REPLY: But, we need another network capable. Only T-Mobile is GSM, but it's a much smaller network.

We need the iPTIB network. Here's what I would offer every caller:

$199 and $299 iPhone
Unlimited data
Unlimited voice
Unlimited SMS and MMS (I'd create an MMS application)

Flat rate. $89.99 a month. You'd never have to worry about overages. Simple. One price. Includes all.

Now if I could just get a network.

Scott -
What you've stated here was my exact point as I replied to a previous post. For me, a very large part of purchasing the original iPhone was the lower package price for voice and unlimited data. I don't consider what I'm paying currently unreasonable. Given the news about the iPhone 3G, I consider the original iPhone to have been a wise investment. The longer I use it, the more it saves me, at the rate of $15 per month. I also have the freedom to upgrade to another iPhone whenever I want, something buyers of the 3G iPhone may not be able to do if they decide to upgrade before their contract period ends. This new version of the iPhone simply has no significant hardware upgrades which compel me to give up that freedom. And every month I use my current iPhone, I save $15. Eventually it will have paid for itself, and by that time I expect a new version of the iPhone will have the hardware (better camera, video chat, more storage, etc) that will let me justify locking myself in for a long-term contract. But it sure isn't here right now. As I said before, imagine if the original iPhone were handled the way iPhone 3G will be - Apple adds 3G and GPS, but if you bought the original iPhone, you'll have to wait or pay extra for the privilege. The price difference for the plans isn't what bothers me, it's the inability to get a better version of hardware when I want to. Currently, AT&T is subsidizing my willingness to pay full price up front for iPhone at the tune of $15 per month, and with iPhone 3G, the situation is reversed, where the price up front is less, but you eventually pay for it over time. One question that I haven't yet seen asked is the question of insurance. I believe that most, if not all, subsidized phones, have the option of being insured through the carrier. Considering iPhone 3G is now just another AT&T phone, will AT&T offer insurance for it? I'm still curious to hear what happens if I continue to use the original iPhone, and six months from now it dies. If Apple is no longer selling the original, and they replace it with iPhone 3G, my plan with AT&T shouldn't go up in price. To make a long story short, I will not upgrade iPhone until the hardware on it improves to the point where I feel compelled to upgrade, and right now it sure isn't there. By that time, Android will be out, probably running on hardware that's at least comparable, and I think the developer community will be pretty large for that as well. As much as I love iPhone, if I can get better hardware and an OS that works for me, that's where my money goes.

SCOTT'S REPLY: I think Apple and Android will eventually do quite the battle. In the end, I agree, you are the one spending the money. It needs to be put to the best use possible.

I'm having trouble putting the pieces together when it comes to Exchange access and required data plans. There are two scenarios in my mind:

1. Buy the 3G iPhone and pay $30/month for data. If I want access to Exchange data than I am classified as a business user and the data plan jumps from $30 to $45/month. I *think* this is what I am reading everywhere.

2. Keep my first gen iPhone and continue to pay $20/month for data. Then, download the 2.0 software for free. Does this mean that I can also access Exchange data without having to up my plan from 20 to $45/month?

How is ATT going to distinguish between first gen and 3G iPhone users when it comes to Exchange data access? Are they going to charge 3G customers $45/month and just let the first gen customers continue to slide at $20/month? Based on their past behavior I don't think this is the likely scenario.

SCOTT'S REPLY: I don't think you are having any trouble at all. You basically have it, plus, whether or not there's an upcharge for using exchange on the original iPhone, which we all know we can. That's up to AT&T and another reason I sit here and await their big announcement.

it definately makes you think twice!

SCOTT'S REPLY: Three times, perhaps.

Based on all of the (mis)information coming from every direction I have to wonder what Apple and, specifically, Steve Jobs thinks about all of this from a brand equity perspective.

The iPhone was the DARLING of the tech community when it was released. Now Apple is starting to reap the fruit of ATT's horrible customer service reputation. People are starting to badmouth Apple based on a lack of information coming from ATT. Where is the clarity on data plans? What are the *real* price points for SMS messages? Etc.

Apple's brand equity is slowly being eroded by ATT. There is nothing Steve Jobs can do about it now because the agreement has shifted from a brave new world (read: non-subsidized, simple pricing) to a carrier-subsidized world (read: confusing, erratic and difficult to interpret).

SCOTT'S REPLY: I'm sure it's not something Steve is pleased about and in fact I'm sure it's a reason the model was the way it was last year ... the Apple retail experience is unlike any other and now it's no longer that way. I'm sure that's a bitter pill for him to swallow.

It's depressing getting nickeled and dimed all the time. Little fees for this and that. Thank God we can't send and receive photos! How did those suits over look that??

Having said all that, I did one of those "select a phone" over at Verizon. they did not have one that has iPhone features.

SCOTT'S REPLY: That's the hard part, David. We want the coolest phone in the world and it only makes sense that we get cool treatment or at least cool plans. To be treated like everyone else is fair on one side, but to me, I'm still buying an Apple product. I'm not buying an AT&T product. And that's where the lines intersect in a murky way that I don't like.

and as a nice aside, US people should know that in the UK and most if not all of Europe, when you use a cell-phone you only pay for OUTGOING calls. The person who calls you pays for your INCOMING calls, but when you RECEIVE a call it is FREE. Here in the USA, each call is paid for TWICE, once to make it and once to receive it, so when you're looking at the minutes ascribed to the various UK iPhone plans, remember that each UK minute is essentially worth two US minutes. Of all the scams of the US wireless industry, this one is the worst.

SCOTT'S REPLY: Ahhh, yes, Grant ... one of the worst rules to date. Definitely much more fair in Europe.

You do know that AT&T has always charged $30 per month for 3G data? No matter what phone they used?

Eric

SCOTT'S REPLY: Yes, indeed ... I was just saying that the price has gone from $20 for non 3G data to $30. That's actually the part I have the least trouble with.

You know, that five year exclusive deal with AT&T was originally negotiated with the knowledge that the iPhone would be sold unsubsidized and with AT&T not injecting their usual conditions and restrictions.

Now that AT&T is beginning to call the shots, I think that five year contract should fly out the window. iPhone users, and those that want to be, have no choice but to agree with pretty much anything AT&T has to say. They've got their customers over a barrel and they know it.

I realize that right now, AT&T is the only company in the U.S. with the infrastructure to handle the iPhone's 3G capabilities, but I'll bet T-Mobile would love to take a piece of that market share in exchange for making a few improvements to their network.

Give us a choice AT&T and Apple! Let us pay $199 and in exchange we'll put up with your conditions. Let us also choose to pay $399 if we want to and let us use them as we currently do with the 1st gen iPhone.

Using jail breaking as an excuse to place these restrictions is BS. People will figure out a way to hack them either way.

SCOTT'S REPLY: Totally, totally agree with you Joe. And all I'm really advocating is a choice. Let me choose. Subsidized vs. unsubsidized. I understand AT&T is a business, but one of the most wonderful pieces of the whole iPhone phenomenon was how the cell phone model we've all learned to hate would be thrown out the window. Now, here we are less than a year later and it's back.

Here's what I am asking AT&T for, Joe. I'm asking for reassurance.

I want to know that one year from now, smack dab in the middle of my new 2-year-contract, that I can purchase -- for some price (full or discounted) a new iPhone. I want to know that the choice to do so will always remain mine. I think I've earned the right.

And until I get that, I can't rest easy. I know I can go out any buy any other product in this world without permission -- well, for the most part -- and I'll be damned if my love for an Apple product is going to be completely dictated by a cell phone company.

what about if something happens to your 3G iPhone? With the first gen you could take it to Apple and get it replaced for $250 or so... what about 3G? And also, if we get pay-as-you-go SMS, does that mean that the beloved AIM app coming out is going to charge me like a SMS??? I thought I could upgrade, but I'm thinking about staying first gen.

SCOTT'S REPLY: Well, the repair portion is unknown. We need more info on that. As far as pay-as-you-go-SMS, let's clarify. SMS is pay as you go now. If you go over your allotment of whatever you have per month, you pay for each. In the new scenario I talk about, you'd have a monthly allotment, just the price isn't included in your plan. So you could still pay $20 for unlimited messages (or whatever the cost is) and never have to worry about what you state here.

My experience with AT&T is that they will NOT let you upgrade early in your contract unless you pay full retail. So if you buy a 3G iPhone 6 months before the next model comes out, too bad.

This one is a tough call for Apple; the subsidized model has lots of annoying issues, but it does put their product in more people's hands because the upfront price is lower. That has an impact on consumer behavior, and they seem to think that they'll sell lots more iPhones at the new price points.

Can someone tell me which mobile carrier doesn't have all these same issues? I've been a customer of Sprint, Verizon, and T-Mobile over the years, and my experience with AT&T has been the most positive of the whole lot of them. Generally, anybody's least favorite mobile carrier seems to be the one they're with at the moment.

Regarding the incoming/outgoing issue in Europe; you also pay when you pick up a land line and dial a mobile, so it's not quite such a perfect setup.

SCOTT'S REPLY: I've had them all too, and I can't honestly rank them. Tough to do.

I can understand the no-upgrade price before the contract ends. I don't have an issue with that. That seems fair. I want reassurance that I will have a full-price option to upgrade to if I want it. I don't see indication that there is such an option this time around, at least not yet, and if there's not, that's the problem.

Seriously, you pay to receive AND make calls on your cell phones in the US? I'm gobsmacked!! How can they get away with that ?

SCOTT'S REPLY: Totally true. Some carriers allow free incoming calls on certain plans. Most allow first incoming minute free, etc. But it's both ways in the States.

but it you think about it, we are all being allowed to upgrade early. For all AT&T customers your ending your old contract at least a year early. They don't have to do this so we can at least give them some credit, because really we are not fulfilling our contracts.

SCOTT'S REPLY: No, not at all, in this case, because we purchased the phone outright last time. AT&T is not allowing us to do anything. In my mind, despite having a contract on a phone that I purchased in full, I'm a new customer and deserving of the intro price.

I am absolutely honoring my contract and signing up for 2 years again from where I'm at now.

They look like they are doing us a favor. They aren't.

what I meant to say in regards to the AIM/SMS thing is that if I put this upcoming app on my first gen iphone with my first gen plan, I get my 200 SMS which probably will count towards my AIM. So, if we do not get any SMS with the assumed $30 3G plan, then unless we pay ANOTHER fee (and pay roughly a little over $100 instead of the $70 I pay now monthly), AIM would become useless to me, anyway. BTW, is there any indication (if anyone knows) if any apps will remain working in the background or not?

SCOTT'S REPLY: All that's going to have to be answered when AT&T releases the official documentation. As far as background apps, not until September at the earliest.

I love the bit about no online activation "so we can answer customer questions." And then charge you $36 for the privilege. (I've never understood this. When you go to the grocery store, the check out clerk doesn't charge you $20 to ring up your groceries. How do cell phone companies get away with this?)

I can hardly wait for all those lines to form on July 10th for the sale on the 11th. Every time I've gotten a new cell phone and plan in the last 10 years it has taken a minimum an hour and half in the store to get it done. And that was for a common phone with only one person in front of me in line. Can you imagine the mess of hundreds of people trying to buy a new iPhone and plan at the same time in the same store! When it was done electronically online it brought AT&T's network to it's knees. Ick.

SCOTT'S REPLY: Shhhhh. Don't give the grocery stores any ideas!!

I was all excited about iPhone 3G and such - but now I am increasingly excited about staying with my unlocked 2G phone on T-mobile! Yes, EDGE is slow, but it is usable for email and iPhone centric websites. Unless AT&T comes up with a decent family plan for voice/data, I'm going to hold fort. I hope the iPhone 2.0 software will work with the "old" iPhones!

SCOTT'S REPLY: I'm sure 2.0 will end up working for what you need in no time. And I do hope that AT&T has a fair price for family plans -- overall, I think they are pretty decent, so we'll see if they stay that way.

Haven't you always been able to pay full price for a new handset from the same carrier at any point in your contract? By that I mean the full, unsubsidized price. They can't keep you from doing that; it's just big time expensive to do so. It really does stink that we're back to this garbage model. You're right- just give us the choice to pay more and be free of these restraints! John is right I guess; it is a tough business call for Apple but it was so nice that they were moving away from this old junk model. Now, in this regard, they're just like everyone else again. You're also right about information flow, pricing and feature/function-wise. Why can't they tell us what they've changed and what they haven't and what the new pricing model specifics are. Should have that info ready BEFORE they announce the release of a product. Not having the features a lot of us thought we were going to get along with this step backward business model-wise has made this roll out somewhat disappointing even considering the cool stuff we will get. If you think about it, we're really not getting anything extra that we weren't expecting. You even had MobileME pegged basically so where's the extra buzz we're accustomed to?

SCOTT'S REPLY: But a carrier doesn't have to give you that access to the full priced model. Most do, and I think the full-priced versions of subsidized handsets are just crazy more expensive than they would have been if they were unsubsidized in the first place.

As far as extra buzz, check the next post. You inspired me to write this one, Brad. Hopefully it addresses your questions.

Not only was the US far behind Europe in the wireless phone evolution (holding on to our dear pagers for a long time), but as much as ten years ago you could buy any phone you wanted, match any plan you wanted from any wireless company in many European countries. Yet, here we are, in the US so disgustingly far behind in the product offered to the customers. The thing about minutes is appalling! I used to live in Europe and when I moved back it took me the greater part of over a year before I could swallow buying a cell phone because the outrageous plans and contracts in the states! I'm sorry, but the US will never catch up to Europe, Japan and other continents unless the wireless companies change their approach...

SCOTT'S REPLY: Don't be sorry, Kris ... you are 1000 percent right about that statement. There needs to be a change. A big one.

I started with an iPhone on a personal account. I transfered it to our company account when ATT started allowing iPhones on company accounts. Since that time ATT has charged companies $45/month for data. This is not new with the 3g phone and it appears it won't change for the 3g phone. Since allowing the iPhone on a business plan ATT has included a $25/month discount on data until the end of 2008 making the price effectively the same as a consumer. I think this will stay the same as well.

SCOTT's REPLY: That's excellent insight from someone who knows. Thank you.

I guess we'll be charged an upgrade fee now also. Don't remember what it is - I think $18.00.

I understand the 3G pricing-but I can't help but wonder if ATT is making a mistake. One of the reasons a lot of people switched to ATT & the iPhone was the attractive rate plan. While the iPhone can be used as a business device, it is mainly a consumer device & I think they may lose a lot of potential customers because of the rate plan pricing. Not sure how it stacks up say, to Vz's plans, but on Vz you get unlimited data for $15. on phones like the EnV, etc. (to me, that's a consumer phone) Also, are we able to tether with the new iPhone? Can we use our old iPhones as backup phones? Will we be able to switch between smart phones? If they don't unlock it for use in other countries, that will also be another nail in the coffin. But, this is just my two cents - we'll have to see how it plays out.

SCOTT'S REPLY: The questions you ask are being held tight to AT&T for now. I hope we'll have a giant FAQ from AT&T PDQ.

wow. I'm astonished that people are not more exercised re the pay for each call twice phenomenon. Paying only once isn't a quaint quirk of the UK system, it was actually made illegal to continue on the US model. As a Scot living in the USA I have to say that consumers here are mindlessly spineless (sorry). Talk about not seeing the forest for the trees......

re some of the other comments:

iChat (lack thereof) - it can only be the money. I'm 100% sure that AT&T will never allow it.

video Chat- given the success of the iPhone, this could even be an FCC thing to protect bandwidth availability. I mean teens would never use this....

enterprise vs cons (sic) - I think that if you go in to the store you're a consumer and if your IT dept calls them you're enterprise. I believe anyone will be able to get email from anywhere, friends or colleagues.

$20 vrs $30 - "it'e the 3G, stoopid....." (vrs edge etc)

AT&T - I currently have AT&T on a family plan (3 phones, 1 iPhone, one SLVR, one RAZR. I actually think they are pretty good. The rollover minutes thing (nb also VERY common in the UK) is very useful. Also, I think it is likely that the price will come down around Christmas when the intro of speciality phones (Project Red, Homer Simspson PhatPhone, GWchimp-phone... whatever) begins.

iPhone - it's going to blow everything away - the apps will keep it constantly fresh and new. It'll sell boatloads on the games alone. The multi nation release will relegate breaking them to the basement, spotty, sad, just-because-I-can minority (and the Russians of course because as far as I can tell they aren't getting it officially. They could atually be the biggest market for trade-ups), sorry, but give it up. They should call it the BorgPhone. MobileMe will rule.

So relax people, smile happily and walk thankfully into a new AppleStepford. It's going to be beautiful.

SCOTT'S REPLY: Good, good read, Grant. Thanks for taking the time to post.

Another wrinkle -- according to an article I read on another site, to discourage the purchase of the iphone for the unlocking market, AT&T will require the return of the iphone if you cancel your contract. This brings up serveral relevant questions.

So if I accidently lose my shiny new 3G iphone over the side of a boat on the second day, am I liable to AT&T for $1680 ($70 x 24 months) plus taxes?

And does this mean that AT&T/Apple and the iphone are going the way of M-soft and their software -- I would not really own my 3G iphone, that I would essentially be leasing it?

And even if I fulfill my 2-year contract, if I terminate service after 24 months, will AT&T or Apple require me to return the iphone?

If the answer to any of these questions is a yes, then those are definite deal-breakers, and I won't be contemplating a 3G iphone purchase.

SCOTT'S REPLY: I can't yet answer the lost iPhone question. I don't think anyone can. There has to be, though, a difference between losing an iPhone and just canceling. One would think.

And as far as you not owning the phone after the contract is up, that's not how it normally works. I think you normally own a subsidized phone after the contract period and I don't see any reason why this case would be different.

Somebody needs to build a big ass MATRIX on all the possible combinations to make ATT rich.

That way we could see in a glance, where / why we are getting screwed.

Thanks.

SCOTT'S REPLY: But remember, AT&T is just one iPhone carrier and they are and have a right to make money. My concern isn't so much the cost, but the lack of details this late in the game. Basically one week since the announcement and I'm still waiting. Same for Rogers. Same for some other carriers. It's not about being impatient. It's about expecting that attention to detail that comes with me signing a contract for 2 years.

After being gobsmacked about US folks paying to receive calls on their mobiles, this is what I find in the paper today! I hope it never happens.

http://www.dailymail.co.uk/news/article-1026783/Now-mobile-phone-users-charged-RECEIVE-calls.html

SCOTT'S REPLY: Oh, I hope it doesn't happen either. So funny how the headline makes it look like it's the most ridiculous thing in the world, but in a place where that's what you are used to, it definitely is.

I get the prices but how much would the TOTAL price be including unlimited text and internet. then not unlimited voice since thats $99.99. but just reg voice and the tax.

SCOTT'S REPLY: I just don't know. We need to wait for the final details to be released. We don't even know yet if there will be an unlimited texting plan, although I'm guessing there will be.

I am on a plan with my other family members. My dad pays so much a month for all of our shared minutes & stuff, and then he pays like an extra $20 or so for me to text. My question for you is, will I still be able to stay on my dad's plan & keep the prices for everything EXCEPT if I would want texting? Or would I have to change my voice plan & everything just because I am upgrading to the iPhone 3G? ...Me getting an iPhone pretty much depends on this factor. Thanks!

SCOTT'S REPLY: Hi, Lauren. If you are upgrading to an iPhone 3G, you need to change the plan, however, AT&T says that you can indeed combine family plans. So, your dad could have a different phone and you could have an iPhone 3G and it could all be under one family plan, but the rate wouldn't be the same. AT&T says that in that case, you'd have to check with them because all situations like that are different. I know that doesn't help as much as you might have hoped, but that's the best information I have as of this moment.

I've considered myself an Apple fanatic for quite sometime, I do love their products and bought the Iphone on day 1 last year. And now, they say -- I'm not "eligible" for an upgrade and that I have to shell 499$ for a 16GB phone. It shows the loyalty that they have for existing customers. Remember Comcast? They sign you up with a "bundle" offer of 81$ for all three services and after exactly 6 months, they raise the price to 130$ and if you notice, there still are new offers in the market for, actually 72$ bundle price. But you know what -- those are for new customers, and not you. You are history now.

It's amazing how the corporate culture in this country has very little loyalty to existing customers, in spite of what they brag about customer satisfaction. Perhaps, it isn't Apple who is doing this or maybe it's AT&T thats adulterating the milk, whatever ever. Steve jobs should take up some shame and responsibility in dumping his company's values and ethics to the garbage to buy himself a Jet Plane.

As for me, I'm waiting for the GPhone in the next two years. And here's the breaking news -- Google GPhone will be completely free with free service plan, free phone and guess what. With free music.

SCOTT'S REPLY: Wait, wait one second ... if you purchased an iPhone on day 1, you are automatically eligible for the upgrade. What makes you think you are not eligible? Everyone with a first-gen iPhone is on the list.

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