One of the constant battles for customers when it comes to their carrier is the device subsidization and contract hell. Well, as with everything with the iPhone and Apple, AT&T has started making unfair exceptions for iPhone customers and allowing them to upgrade to a new device for the same subsidized price as if they were a new customer or an eligible upgrade customer. This is yet another example of them being unfair to non-iPhone customers and I'm curious when someone files a lawsuit against them for unfair treatment (or hell, this has the opportunity to be a class-action lawsuit to be perfectly honest).

Disclaimer: I do not have a service contract with AT&T.

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I saw the press release on their website stating that certain iPhone users who were within x number of months of eligibility could upgrade to the new iPhone. What a load of crock.

I *hope* someone files a lawsuit.

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But how much of it is AT&T and how much is pressure from Apple? I'm convinced the margins for networks selling iPhone are the smallest of profit margins when you take in to account the wholesale purchase price of hardware (for which Apple will do no one any favours) and the insane profit share of airtime (circa 30% line rental and call revenue).

The reality is that networks don't want people to upgrade their phones every 5 minutes as these subisidies (especially on hardware as expensive as the iPhone) massively dilutes your profit margin. So I think a lot of this comes from the Apple Board room.

This is why I'm glad service providers cannot sell iPhone solutions. Consider the average margin on wholesale airtime to a service provider is roughly 20%. Out of that 20% you have to run your business, subsidise handsets and at the end actually make a profit. iPhone makes it very hard for you to do that (especially when you have to give 30% of your revenue to Apple). I have to say I'm on the side of the networks here because it just isn't in their interests to let customers upgrade early - this stinks of Apple pressure, a company that knows nothing about the mobile telecommunications industry thinking it can just apply its own financial model (and sadly the networks are bowing to the pressure).

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What if 10,000 people with a Samsung device purchased 9 months ago decide they want the latest Samsung device that is being released next week at an upgrade, subsidized price? AT&T will tell them they have to wait 3 months or buy it at full retail price. Is that REALLY fair to the consumer given that AT&T made exceptions for iPhone customers? Profit margin or not, I believe they have a responsibility to treat their customers fair, no?

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You're right, it's not fair on the Samsung customers, but you're still missing the point. I don't believe this is about AT&T mistreating their non-iPhoney customers as no network, dealer or ISP wants it's customers to upgrade ever, let alone early, as it costs them money and dulites the margin (regardless if that customer has to resign their airtime agreement). I am 100% convinced this is part of Apple's demands on AT&T, and that AT&T is having to bend over backward (in many instances making a loss) to meet Apple's requirements. Now, nobody put a gun to AT&T's head to sign the iPhone contract, so one presumes this was a decision taken to increase market share (and we know at any company AGM, the shareholders are only interested in increases in connection numbers and subscriber base and not profit margins on airtime or customer APRU), but the fact remains it would not be in AT&T's financial interests to let a customer upgrade early, especially on one of the most expensive handsets available!

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Si MCTS
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I am an AT&T customer and my wife REALLY wants an iPhone. We are now 6 days away from our upgrade eligibility (get a subsidized rate) date and AT&T has refused to let us upgrade early. In fact a corporate store employee and a Customer server phone rep have both told her that they would do the early upgrade with any other phone, except the iPhone.