So, why is AT&T really allowing early upgrade??

I think this should be the biggest question coming out of the announcement. AT&T is a business, and offering discounts on phone is covered by getting their 2 year contracts. So, giving people an early out is the same as losing revenue. There has to be more to this story!

Like others, I immediately imagined that Apple and AT&T's exclusivity agreement is reaching it's end and AT&T wants to lock in as many people as possible before the iPhone goes to other carriers. Combining this seemingly altruistic move on AT&T's part and their recent steep increase to their early termination fee, it seems very likely.

So what does everyone else think? Any other theories or information on this weird situation? It really makes me torn because if iPhone went to Verizon I would most likely go as well.

Checked on when I'm eligible to upgrade... it's in Feb... 6 months prior to my current contract expiration. Think that's just standard time frame.

At&t want's that exclusivity to last as long as possible with as many users as possible. I really don't get it, It seems most other countries around the world all have multiple carriers Australia,UK,France,Russia and many others have 2 or more carriers. Apple has to be making money hand over fist from At&t. Look at it like this Apple nor At&t will even sell an iPhone without a contract not even for full retail price of $699.00 can you walk in and buy one outright. There is no telling what they have up their sleeves maybe it has to do with changing the iPad unlimited plans.

I agree another carrier would be great in the U.S. even if it wasn't another carrier at least an unlocked version like you can buy in many other countries would be nice.

Its a 2 year contract, AT&T will make the money for the phone back in the at least the first year. They will let you upgrade 6 months early to get you into a new 2 year contract. Your right it is just business related

On the single carrier, my take is that apple likes to introduce lots of new features such as visual voice mail and face time. Working with one main carrier in the US makes this easier for them. Network changes have to be made for both visual voicemail and facetime, when it not WIFI only. It would take much more time to negotiate with say AT&T and Sprint than just one network.
Once a feature is confirmed for US, networks in other countries have to follow suite really.

dudeking said:

On the single carrier, my take is that apple likes to introduce lots of new features such as visual voice mail and face time. Working with one main carrier in the US makes this easier for them. Network changes have to be made for both visual voicemail and facetime, when it not WIFI only. It would take much more time to negotiate with say AT&T and Sprint than just one network.
Once a feature is confirmed for US, networks in other countries have to follow suite really.

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I have to disagree RIM has been building hybrid phones. And cross platform phones for several years and for virtually every carrier in the world.
The Blackberry Curve comes in both CDMA and GSM versions it's sold on all major U.S. Carriers


My answer it's all the about the money.

bobtomay said:

Checked on when I'm eligible to upgrade... it's in Feb... 6 months prior to my current contract expiration. Think that's just standard time frame.

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I think so-called early upgrade hass been an option in the past, but the price is typically higher for the handset: somewhere in between the fully subsidized rate and the full retail price. In this case they're giving the fully-subsidized price early.

dudeking said:

Its a 2 year contract, AT&T will make the money for the phone back in the at least the first year. They will let you upgrade 6 months early to get you into a new 2 year contract. Your right it is just business related

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True, but why let people sign another 2 year contract now when you can get more money out of them for another 6 months and then get them to sign the 2 year again? Unless you're concerned that some triggering event will happen in the next 6 months that may cause you to lose that customer and future revenue stream.

It could be something more minor like the rise of Andriod popularity, or it could be something bigger like losing exclusive rights to your biggest cash cow ever.

I have been with AT&T since the iPhone was released ( left Verizon and glad of it ), and as a customer that spends 100+ a month I have always been able to upgrade at the lowest price every 12 months. So I have never missed out on a new model on launch day so Its not that big of a stretch to see them pushing some people up a bit...


Clay

So did you: A. sign a new 2 year contract for the 3G when it came out, and B. get the fully-subsidized price and sign another 2 year contract for the 3GS when it came out? If so, I'd like to know how you did it because I'm pretty sure that is not the norm. If it were, the whole "upgrade 6 months early" thing would actually be a big joke!

The answer is yes to all the above . Paid $599 for 8 gig iPhone ( remember those 1st months of paying full price ?) and signed a 2 year contract as a new customer. 1 year later was given the option to up grade to the 3g for $299 and sign a new 2 year contract which I did ( and sold the orginal iPhone for $275 ). 1 year later was givin the option to up-grade to the 3gs for 299 and sign a new 2 year contract , which I did ( sold the 3g for $325 !) And now I am able to go to the iPhone 4 for the 299 price if I sign a new 2 year contract.

This is a standard policy for AT&T customers that spend 100+ a month for 12 months and I do . ( now that I think about it it may be 125 but still....)


Clay

Ok, I understand now. You must have a hefty minute plan! I guess an additional $300 of revenue over $1,200 per year from you makes up for them letting you upgrade a year early.

Still, if there's not other factors at play, I think it comes down to a decision of do they ultimately make less money and have people loyal for a shorter amount of time, or make more money and keep people on longer. Any sane business person is going to go for more money and keep the customer longer. There just has to be something else in it for them.

Like an auto dealer don't really give you free oil changes and cell phone companies don't really give you free phones. There's always something in it for them.