AT&T iPhone 3G $199/$299 Pricing Policy

After our story about the AT&T subsidy for the Apple iPhone, it appears there remains an enormous amount of confusion about AT&T's iPhone 3G upgrade policy. We had previously posted a guide based on circulating rumors describing individual eligibility for the $199/$299 iPhone 3G pricing.

The main area of confusion relates to existing AT&T customers who don't currently own an iPhone. Some interpreted Apple's initial announcement of $199/$299 as an absolute price, not subject to qualification. Adding to the confusion is that AT&T sales representatives are giving conflicting information about whether or not individuals need to meet special eligibility requirements.

A recent InformationWeek story provides some official word from AT&T spokesman Mark Siegel. Siegel clarifies once and for all that current AT&T customers using something other than an iPhone will need to qualify to receive the iPhone 3G's subsidized $199/$299 price.

While payment history is one factor, "how long the person has left on the current contract" also weighs into the decision. Siegel refused to provide exact criteria since "there's a whole lot of variables, and [he] would hate to give specific criteria." AT&T's standard upgrade criteria, however, are published online and depends on a combination how much your monthly bill is and how much time is left on your contract.

Siegel states that an "unsubsidized" price for the iPhone has not yet been determined and AT&T will announce that price sometime before the iPhone 3G goes on sale.

To Summarize:

- iPhone 3G will launch in the U.S. on July 11th
- $199 (8GB), $299 (16GB) represents subsidized iPhone 3G prices
- If you are currently an iPhone AT&T customer or not currently an AT&T customer, you qualify for the subsidized pricing
- If you are currently a non-iPhone AT&T customer, you will be subject to certain qualification criteria. AT&T's "standard" upgrade criteria are posted here but may be subject to change.
- If you don't qualify, there will be a higher unsubsidized price for the iPhone 3G which will be announced before July 11th.
- Speculation: While rumors have pegged AT&T's subsidy at $325, it seems very unlikely that the unsubsidized price will be this high ($199+$325). Historically, canceling your existing mobile phone contract for the typical $175 early-termination fee would automatically qualify you for any future subsidized phones. As a result, we suspect the unsubsidized pricing will be about the same as the early-termination fee (about $199+$175 for 8GB).