A couple of us were discussing the irony surrounding iPhone 5 pricing. We find it ironic that people will go nuts about simple things like a small billing fee that Verizon once tried to charge it’s customers or how they previously even went nuts over iPhone pricing. However, it looks like customers are a bit calmer these days since this year an annual iPhone upgrade may cost many customers full retail price and the internet is practically silent about it.
Remember the drama a few years ago that Apple faced after dropping the price of the iPhone by $200 two months after it went on sale? The customers, tech blogs, news agencies and practically the entire Internet were up in arms about it. Subsequently Apple did an about face and offered Apple and AT&T customers a $100 store credit as you can see in this letter from Steve Jobs.
These days it looks like iPhone customers are a lot more timid. Gone are the days when iPhone users grabbed torches and pitchforks to storm the walls of Apple and AT&T to demand better iPhone pricing and it all started last year.
Last year was the first year that iPhone 4 users weren’t able to upgrade and receive fully subsidized pricing on the iPhone 4S. Instead on average they paid $200 off the full retail price on launch day for a new iPhone 4S. This opened the door for an AT&T contract extension and that extension is what brought some AT&T customers to where we are today.
This year things are a lot worse. If you are an iPhone 4S user that purchased their iPhone 4S in October 2011 on launch day you’ll have to pay full retail price if you want an iPhone 5 on launch day. That means you’ll pay $849 for the 64GB iPhone 5 from AT&T.
We took a look at the situation and we contacted AT&T today to find out how this pricing affects the customer’s current contract. According to the AT&T representative that we spoke to at a local AT&T Corporate Store in Houston, Texas there is no change to the customer’s contract. This is due to the customer paying full retail for the iPhone 5. Therefore if you are an iPhone 4S user upgrading to the iPhone 5 and you do not receive any kind of discount on the new phone your contract terms will not change.
The good news is that this means next year when Apple releases the iPhone 5S or 6 you’ll probably be eligible for either a fully subsidized discounted price or a less than retail cost discount.
We’ve reached out to Mark Siegel, Executive Director Media Relations at AT&T, for confirmation about whether or not this is AT&T’s official stance on these particular circumstances or not. We’ll update this post with his response when we receive it.
See also: AT&T: iPhone 4S users won’t get discounted pricing for the iPhone 5 at TUAW.