Editor's note: Just wanted to post a quick note about the misinformation this morning. I know that many of you are visiting this blog for the first time. I pride myself on being credible and checking every single fact that goes on this blog, and that's something I did this morning before posting this information. So I want to apologize for leading anyone astray. The person that I talk to at AT&T is someone I trust, but we're all human and sadly we all make mistakes. Rest assured that I do everything I can to provide you with 100 percent accurate information and I'll always make that priority No. 1. Thanks for calling.

**UPDATE 2:24 p.m. -- this information has been corrected ... here is the new link to the most updated information. You DO NOT have to turn in your old iPhone to upgrade. AT&T made a mistake and provided incorrect information. Click here for the new story**

Wednesday, June 11, 2008 -- 11:51 a.m. -- on my couch

**UPDATE 12:39 p.m. -- no word from Apple yet. But as I'm thinking about this, it makes me more mad. I own that iPhone. It was unsubsidized. I bought the equipment up front. AT&T has no right to take it ... let's hear from AT&T on why it thinks it has a right to take my equipment, contract or no contract. Make sure you let anyone who doesn't read this blog and has an interest in iPhones know about this breaking news story.**

Here is something that you may not have known. Something you need to know.

I just finished an e-mail exchange with an AT&T spokesperson who told me that if you upgrade from your current iPhone to iPhone 3G at an AT&T store, you need to turn in your first iPhone to qualify.

Currently, I have a message into Apple and haven't heard back on what its in-store policies are. AT&T says they do not know what Apple's policy is, so this post only regards AT&T stores for now, but here's what I know:

* This goes for everyone with a first-generation iPhone, regardless of purchase date.

* There is no non-subsidized price -- meaning, you can't pay more and keep your old phone. If you buy at an AT&T store, you must part with your original iPhone to qualify for the deal.

* AT&T said earlier that if you purchased a first generation iPhone after May 27 that you can trade it in for the new one for free minus a 10 percent restocking fee. This is completely independent of that. This goes for everyone upgrading to 3G at an AT&T store.

I will update all of you as soon as I hear back from Apple. If Apple's policy matches, everyone needs to part with their original iPhones to get a new iPhone. If Apple's policies are different, looks like the lines will be at the Apple stores for sure.

Again, this post is only for those going to AT&T stores until further notice.

Please, let's discuss this in the comments.

Oh, my take? Sorry, AT&T ... this is ridiculous and unfair and almost hurtful.

I paid $599 for my iPhone. Unsubsidized. Yes, I'm on a 2-year-contract with it from AT&T, but I purchased the equipment. To be told that I need to turn it in to qualify for my next iPhone is a slap in the face that hurts more than a strong San Francisco wind on the Golden Gate Bridge.

In other words, it stings!!

I was hoping that I misunderstood this policy, because I'd never imagine in a million years that I'd need to part with my iPhone for any reason, other than to sell it or give it to a friend.

My inquiry to AT&T started because someone asked whether or not AT&T would unlock their original iPhone to be used as an iPod or backup or something. When I asked, I was told that the policy for AT&T stores states that the original phone must be turned in.

You know that I never mince words and that I'm not afraid to take on the big boys ... well, AT&T ... I'm taking you on ... this policy is unfair and is exactly what's wrong with the cellular industry today. It's a prime example of why there needs to be a change.

I really thought Apple would be the catalyst for that change. Appears I was wrong, because here I am letting you know of a policy that just stinks

OK. Your turn.

Can't wait to hear your thoughts.

Thanks for calling.

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Hi,

In the UK it's different, we are able to keep the iPhone, and even give the phone to another person, who can then get a new SIM card on the iPhone tarriff to use in it.

full details here - http://www.o2.co.uk/iphone/existingiphonecustomers

WHAT!!!!!!! What would happen if I sold my iPhone (& switched to a reg. Plan) I wonder how much it would be to get the 3G then... I wonder does this also mean there will be a different price point 4 non at&t people?!
This Sucks!!!

SCOTT'S REPLY: Can't do it, according to AT&T, because you are under contract. Maybe at an apple store. Still waiting to find out. But you read this exactly like you think you read it.

I actually hope I find out later that this is wrong, but this is what AT&T says.

Should we just give them our wallets? Oh, wait, that's what this means. Do they want us to turn in any other item we own that they didn't pay for as well? I'm with you Scott, this is wrong. Unfortunately, they are the big-boys and we are just peons. That was why I was hesitant going with AT&T to begin with. So, AT&T is showing its true colors. Could this tarnish Steve Job's aura as well?

Does not sound right. Our phones were not subsidized, so AT&T has no right to the phone. Further, their revenue sharing will stop when we sign the new contract and receive a subsidized phone. So it's good for them to switch us over, but I don't think they can require us to give up our phones, since we own them outright.

See: http://bits.blogs.nytimes.com/2008/06/09/att-new-low-price-will-move-iphones-to-mass-market/

WOW, what variety of crack are they smoking? When upgrading other phones in the past I NEVER had to turn in the old one. EVER.

The whole idea behind contracts is to protect the money paid by the carrier to subsidize the customer's purchase. After the contract is up, you've essentially paid back the carrier for that subsidy. They never ask for the phone back when you're done with it.

In the case of iPhone 1.0, AT&T never subsidized the hardware. They are not entitled to getting them back. Period. Why should anyone give their phone back, just so Apple can use them for warranty swaps? I assume AT&T would give them back to Apple. Or, can you imagine if AT&T tried to sell them "refurbed" at a discount price! That would be scandalous!

I'm pre-pay customer so it doesn't really affect me, but if I were to plop down the heavy deposit that they'd be requiring of me to get a post-paid account, I'll be damned if they'd get my old iPhone back! I'd give it to a family member so they could hook it up.

I know Apple has sales targets to meet with respect to the iPhone, but I'm sorry, with all of the new changes announced around iPhone 2.0, it would seem they've sold their soul to the devil!

Oh, and what happened to this whole idea of open networks and no contracts? I guess that flew right out the window.

I really can't wait until some of that 700 MHz spectrum begins its new life. It's really going to change the playing field among the cellular carriers.

SCOTT"S REPLY: Right. They didn't subsidize it. That was my question to AT&T .. what right does it have to take it. But the contract isn't up. That's the difference here for everyone. When the contract is up, you keep the equipment. For people now, the contract is 1 year old. Halfway through.

That is so ridiculous it's hard to imagine it's actually true! I own this phone without a contract and paid accordingly for it and they're going to tell me I can't keep it? This whole roll out gets more bizarre by the post. First, we find out we don't get the function upgrades we all expected, then we find out we're reverting to the old subsidy business model that we were so thankfully moving away from in this industry lead by Apple. Now, we get this nonsense from AT&T/APPLE? I'm sorry but at this rate, the only people that will or should support or patronize this kind of behavior are Apple lemmings who just fawn over and buy anything and everything they come out with. I am not 1 of those people and won't support ANY company and their products when they behave this way. Every consumer decision for me is done on a case by case, product by product basis and this type of blatant arrogance tells me that Apple is counting at least to some degree on blind faith support that I, for 1, will be NO PART OF! Shameful behavior.

WHAT?!?!?!?!!!!!! You have GOT to be kidding me. Nope - that's it - no deal here. I absolutely REFUSE to hand over my current iPhone. I had plans to sell that to help pay for the cost of the new one. This is the most stupid thing I have every heard of!! This move could very well cause me to walk away from AT&T and the iPhone for good.

If Apple has the same policy - forget upgrading. I have never had to give over my phone to get a new one and refuse to start now. We paid good money for this phone. I have the right to keep it since I paid full price and either pass on to a friend or sell it.

Stupid, stupid move. I am so MAD about this one.

This absolutely STINKS!!!. When I bought my current iPhone (September '07) I was ticked off then because of the fact that I had to buy the phone outright at full price PLUS sign a two year contract.

Now your saying that the iPhone I bought at full price AND signed a two year agreement with AT&T doesn't belong to me after all ... that is if I want to get the new iPhone I have to let go of my old one ...

Absolutely ridiculous!

This is just one of the reasons why people hate cell phone companies.

Prediction: AT&T will change this policy before July 11

I don't think that this can be right...it doesn't make any sense as a business model at all.

The phone you trade in has not value to them at all...there will be no real market to resell it...and furthermore I would guess that most people who intent to keep their old phone will be planning to do something like I plan to do...which is to give it to my teenage some that doesn't currently have a cell phone.

SCOTT'S REPLY: Nope. Makes zero sense. I asked over and over if they were sure about this and was told that it was 100 percent correct.

That would mean MORE revenue for them

Voice meet iPhone. iPhone meet Voice…you’ll be wonderful together www.nuance.com/mobilesuite 

But wait ...

The contract has nothing to do with the equipment ... the contract is for using their cell and data services.

I think that a class action would come to fruition if AT&T pushed this simply because there was no subsidizing to begin with. Customers purchased the phone out right.

Wow the audacity of these people. Well I got mine through Apple online and I already had an AT&T contract so they ain't getting squat from me.

I can not belive that they think they could ask something like this. You should be able to give them a phone outta your basement if they need a phone.

Are you sure? That don't even sound legal.

What a load... LOL I might just get another phone at then end of my contract and buy an Ipod Touch... LOL (kidding)

well I guess if this pans out to be true i wont be getting 3G until my contract is up at the end of next year, unless for some reason this one becomes non functional and who know by then we might have Iphone 3.0 or 4.0 LOL

hey Scott if I have to give up my old iPhone do I get the new one at a discount? like say 99.00?

AT&T wont be getting something i paid for and activated myself.. sorry.

Scott-

I actually just got off with an AT&T Wireless representative and he told me that we would NOT have to turn in our existing iPhone. He said that I bought the equipment and would not have to turn anything in because I own it (which obviously is true). So I'm not sure if the person that you were emailing with had good information or not but it makes more sense with what the gentleman that I spoke to said. Keep up the great work! Have a great day!

Jim Schwartz

HAHAHAHAHA. This policy won't fly with consumers. If this is truly the case, I bet they get pressure from consumers and Apple telling them to knock it off.

But thanks for adding to the reasons why I WON'T upgrade yet.

Opps - I just LOST my iPhone. I need to purchase a new one. Now what happens. Can I get the 3G upgrade? This Just dosn't sound right.

I find it funny that almost imediatly after Apple puts the power back in AT&T's (TelCo) hands they find a way to stick it to us. The look on my face=not surprised

I was on the fence on whether or MOT to purchase the new iPhone. It seems that they are making my decision much easier. With all of the additional fees, lack of basics, theft of my 1.0 and sentence to another 1 year contract I am thinking not.

If one were to somehow obtain a new 3G would the phone be able to just have the SIM card from 1.0 placed in it and have it function? Or if it were to be jailbreaked? What are T-Mobile customers with the i going to do?

Not Happy

i need to wait 24 hours to comment.....this has me livid.....if apple concurs with this philosophy i'm done....jailbreak for one more year and run for the RIM!!!! then i will put my iPhone 1.0 up the at&t loophole.....

Not only did AT&T not have to pay a subsidy on iPhone 1, they had to pay Apple a monthly bounty. If you upgrade to the 3G next month AT&T will save $120+ bounty! Plus, according to this post, get a resellable iPhone 1.

Just to confuse things, I talked to AT&T and they said that is untrue, once you buy a phone it is yours

I don't believe a word of it. Was the response really from an AT&T "spokesperson" or just some clueless CS cog answering emails?

AT&T can't be serious - that is outrageous and makes no sense.

So far O2 seem to be handling things pretty well in the UK: all the upgrade costs are out, the plans are out (and they haven't increased anything) and no mention of handing over your precious iPhone 1.0 in exchange for anything. They've even lined up a second free WIFI partner for us in the UK. Hmmm, thinking about it, there must be something bad hidden in the fine print somewhere!

I find this VERY VERY VERY VERY hard to believe. Are they not going to let you buy an iPhone if you have had your original iPhone stolen?

I'd put money on the fact that you misunderstood something.

Is this legal?

Maybe this will explain it:

http://tinyurl.com/6ycb5h

I hope this is true...

I'm calling BS on this one. I expressly discussed this with the AT&T rep when I bought my refurbed iPhone a few months ago.

I guess in my case it won't matter as my wife is getting this one and I'm getting a 3G.

-jf.

AT&T Has GOT to be nuts! Are they going to make the BB owner hand in their phone to get the new iPhone? Why would you give them a $600 phone and pay them $200 - $300 for a new one!?!

They are definitely going to lose business over this move. I hope Apple has a different policy. This is just dumb!

It makes plenty of sense, if you look at it solely from the angle of people who are NOT eligible for an upgrade.

- AT&T and Apple have been pretty clear so far that there is one subsidized price around the whole world, $199. What if you are not currently eligible for an upgrade? There is NO "unsubsidized" price. So AT&T won't sell to you.

- If you were not under contract when you bought your iPhone, you were already "eligible" for an upgrade. The iPhone was bought at full price, so you are still "eligible" for an upgrade, which means you don't need to turn in your iPhone v1.

- If you were under contract when you bought your iPhone (as I was), and are still under that contract - AT&T can't sell you the phone, is what it sounds like. This is a workaround to that problem ... if you give up your old phone, they'll magically make your account "eligible" again.

- Although we don't know the terms of the contract rewrite between AT&T and Apple ... if AT&T still has to pay $18 per month to Apple for each iPhone v1 data plan out there, it is to their benefit to get as many iPhone v1's off the market as soon as possible. Maybe Apple has offered to take inventory back from AT&T and other carriers and AT&T is going to take advantage of it.

Of course, it makes no sense at all - if you look at it solely from a PR angle. But if you look at it from the position of Apple and/or AT&T ... there are reasons why it may make sense.

Scott:

I can't believe what I'm hearing. I think that's going to keep me from upgrading. I just talked to my sales associate at the AT&T store and she said that's what they've been told. If the contract is not over then you supposedly cannot upgrade unless you turn in your old iPhone. This really does suck! Maybe I'll wait anotheryear and then upgrade. Perhaps by the they will have included MMS, cut and paste and video conferencing. It will undoubtedly also be available in a 32 Gb size as well.
I believe that if they keep up this way it's going to affect the iPhone adversely. Maybe if I offer them my first-born then maybe I could uprade and get to keep my old iPhone, too. Hmm... thought for the day!
Thanks for keeping us updated, Scott. I am counting on you to keep us in the know.

Jeff

That sounds crazy. O2 UK is suggesting you give your old iPhone to a friend or relative, even offering pay-as-you-go iPhone SIM cards. They could potentially double the number of subscribers. AT&T will clearly alienate and outrage their customers with such a policy. I would imagine O2 Ireland will let us keep our iPhones for family members etc, but I didn't actually hear anything concrete about this yet.

They're out if their ever-lovin' blue-eyed minds. Like you, I paid $599 plus 6.5% FL sales tax. I was planning to upgrade both iPhones on the 11th (one 8 and one 16GB) and give the oldies to grandkids, whose parents would have paid AT&T the premium for them to use it. Now it appears we may have to wait a year unless we can get them from Apple without the trade-in. I'm mightily disappointed and not a little furious with Ma Bell.

SCOTT'S REPLY: So sorry for all the confusion. This was incorrect and the post is clarified and corrected.

I posted on my blog about this and linked back to your posting. It's a new blog so there really isn't much in the way of readership, but I think everyone should be spreading the word about this. We've got a month to stop it.

http://josephghammashi.com/2008/06/att-wants-old-iphone-back/

SCOTT'S REPLY: Thanks for the post and for the correction. Sorry to give you extra work!!

Hi there. I am in the UK and can confirm that 02 ARE NOT asking for old handsets back. They are actually offering pay as you go sim cards to use with your old iPhone or will facilitate conversion to an iPhone contract for any 02 user inheriting an old iPhone, at no charge.

SCOTT'S REPLY: Thanks, Alexander. Yep. I checked with them too and they told me the same thing. And now that everything is clarified about the mis information this morning, hopefully now we can get some more exciting details!!

Not sure what your AT&T guy was smoking, but I would love some, thanks. Per our conversations with AT&T your 1st Gen iPhone (bought pre-May 27) is yours free and clear and they will NOT ask for it back.

Mike
http://tuaw.com

It sounds like a consumer protection issue to me. When I purchased my iPhone for full price ($599) I was told that this was not a subsidized phone. I self activated which meant that I could have chosen to never active the phone at all. Additionally, I was required to sign up for a 2 year extention because I add the iPhone data plan to my existing AT&T service which was no long under contract. Add to this the new policy that ETF are now prorated by AT&T ahead of a federal mandate. This all seems suspicious and the very sort of things that States Attorney Generals enjoy grabbing headlines over. It will be interesting to see how things play out.

SCOTT'S REPLY: The information has been updated to reflect AT&T's mistake -- and I've updated to say how sorry I am for all the confusion and misinformation from my end.

Oh well, at least this blog got lots of hits and deservingly so, as it is still my favorite source for reliable iPhone news & tidbits.

Thanks for the update Scott. Keep up the great work.

SCOTT'S REPLY: Thank you, Dave. That's nice of you to say. I still feel bad because accuracy is my big pitch.

I just called AT&T after reading this and the sales person told me you do not have to turn your old iPhone BUT there is an $18 upgrade fee. What a bunch of bull sh%t.

Anyway, she also told me that I have to activate the new iPhone in iTunes but that I can switch SIM cards rather than calling in and having AT&T do a manual switch of IMEI numbers, etc. She told me as long as the SIM card on the old iPhone has the 3G fireball on it then I am good. I never took mine out before, so I checked and it does have the 3G icon.

So, I am thinking of switching SIM cards after I get the new iPhone and then plugging it into iTunes, hoping it just activates from my phone backup and then starts syncing. If it does, then I guess they don't know I have the new one and I wouldn't get charged the $18. I did confirm you do not have to call in to add 3G on your plan, so I am hoping I can do this and save the $18.

SCOTT'S REPLY: All of that information is incorrect, setec. You can't activate a new iPhone 3G in iTunes. Not sure about upgrade fees, but that sounds wrong. For now, I highly recommend going by what i have here, as I know now with 100 percent certainty that it's correct and I do know there will be absolutely no iTunes activations for the iPhone 3G.

Can you post the email thread that you had with an AT&T rep that states that as a current owner of an iPhone, you would need to turn in that iPhone in order to purchase another iPhone? (Albeit, a subsidized one.)

SCOTT'S REPLY: No, I'm not going to post that. We've already established that the information was incorrect. There's no point in rehashing what's been corrected.

I just found this information and I was initially thrilled when I heard we could trade it in for a new one. After hearing what your saying I can understand why you would be pissed off. I payed $399 for mine. In your initial post you stated that anyone who purchased an iPhone after May 27 would qualify. I bought mine in September 2007 after the release date back in summer '07. Does this mean I wouldn't qualify.

SCOTT'S REPLY: Correct. You wouldn't qualify in this case.

Also, will the plan for the iPhone 3G be more expensive since GPS is an additional feature?

SCOTT'S REPLY: Yes, but not because of GPS ... because of the 3G speed. AT&T hasn't released the numbers yet -- hopefully this week -- but the data plan appears to be $10 more per month than before and there will likely be some sort of extra charge for text messaging.

I know you probably think I should be outraged about the trade in, but I don't know anyone that would be able to pay the monthly bill that doesn't have it already. (Poor college student) And I don't have much use for 2 of them. One final question, will they take it if there is something wrong with it. There is absolutely no scratches but the vibrate on the phone sounds like there is a stripped gear.

SCOTT'S REPLY: To answer your last question, they won't take it back anyway because it wasn't purchased after May 27, so that point is mute ... sorry.

Class action against a contract you signed (but didn't read)? Arent't you the cutest THING!?!?

Why are you intelligently fighting a system only geared to deal with idiots? You're not "upgrading" your phone, you "lost" your other one. Or, you're buying your daughter a phone, or GOD-forbid, you move over to the FAR more useful (and infinitely more sexy) Blackjack phones (Pearl is yummy). In fact... I've wanted one for a while so I can, you know, get things DONE.

Yeah... don't mistake "interface" for "useful".

Db

SCOTT's REPLY: The cutest thing? Awwww. Thanks for the comment, Db.

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