I really don’t understand why there is so much complaining around the web about the iPhone upgrade pricing. Apparently if you have an iPhone 3G you can’t just upgrade to the 3G S for $199. People are all up in arms about this. But I don’t understand why.

The iPhone 3G was subsidized by AT&T which is why it was $199 instead of $399. The deal with this is that AT&T picks up the difference (granted it’s not a full $200, but it’s something). AT&T can do this because over the two year contract you signed they will make up the money. But if in a year in you buy another subsidized phone, then AT&T probably hasn’t made back their money from the first phone. Hence the reason that they won’t give you the subsidized price but will let you get one at full price.

The thing is this is always how mobile phone companies have worked. If you sign a contract, you get a deal on a phone, and you can’t get another deal on a phone until your contract is up. Apparently a lot of people are crying foul because last year you could get the 3G at the subsidized price even if you already had the original iPhone. But the reason for that is simply because the first iPhone wasn’t subsidized, so AT&T wasn’t losing out on any money.

So why are people so pissed? This is how phone companies make money. I agree that it’s disapointing, but anyone who says they are pissing off their “loyal” customers make me laugh. If you were so loyal you would honor your contract. Most of the iPhone customers weren’t even customers 2 years ago.

</end rant>