3G iPhone to be in-store activated; free upgrade for recent buyers

[AppleInsider]

Apple in the US will attempt to stifle the proliferation of unlocked iPhones by requiring that all of the new handsets be activated at the time of purchase. Meanwhile, first-gen iPhones purchased after May 27 will reportedly be eligible for a free upgrade to the 3G model.

Speaking to Gizmodo, AT&T's President of National Distribution Glenn Lurie reportedly confirmed that there will be no in-home activation for iPhone 3G like there was with the original iPhone.

Instead, all iPhone 3G customers must have their new handsets activated in either an Apple or AT&T store, a process which "takes 10-12 minutes." This should do wonders for the first-day line on July 11, the gadget site speculates. (This was also confirmed during an AT&T conference call, AppleInsider has been told.)

Lurie said AT&T and Apple will provide more details regarding the sales procedures for the new iPhone sometime "in the next week or so." However, he said not to expect online sales of the iPhone 3G at launch, meaning a retail store may be the only place to snag one.

Separately, both Gizmodo and ArsTechnica are reporting that consumers who purchased an original iPhone on or after May 27 will be able swap it for an iPhone 3G at no cost.

The two reports add that AT&T will make all iPhone 3G buyers sign a new 2-year contract which will overwrite any existing contracts. That means AT&T won't tack an additional 2 years onto any existing contracts but will instead wipe existing contracts out and start fresh with a maximum 2-year commitment from the date the iPhone 3G was purchased.

[ View this article at AppleInsider.com ]

[SpamSandwich]

This will slow, but not stop the unlocking. Apple has created an antagonistic environment for consumers with their devil's contract with at&t.

[wolfneuralnet]

That is going to be a long and nasty line...

Maybe the AppleStore people will know how to activate them more easily.

What an unbelievable PITA this is going to be. So much for getting them to move my existing phone to another line - that would take another 2 hours I am sure...

What fun.

[Rot'nApple]

Originally Posted by SpamSandwich

This will slow, but not stop the unlocking. Apple has created an antagonistic environment for consumers with their devil's contract with at&t.

If you are required to sign up for a two year att agreement then and there whether purchasing the 3G iphone from an att or apple retail store, does that mean they will be doing the same standard practices across the world? Can you buy an iPhone from overseas? Or will you be tied in with the "carrier" representing that country and have to sign up for and pay for their plans as well.

Why would I want to buy a phone and have to sign up for a contract then and there then go home and "jailbreak" to go use some other carrier? I still would be receiving a monthly minutes bill from the carrier I don't want to be with, wouldn't I???

Or how much would it cost to cancel a phone minutes plan you just purchased to get out of a contract in order to get into a contract from a carrier you want to be with? How will a Jail broken iPhone help out with this?

[SpamSandwich]

In other significant news... Cisco, Intel, Alcatel-Lucent, Clearwire, Samsung and Sprint have formed a WiMax patent pool.

http://www.networkworld.com/news/200...orm-wimax.html

This will speed WiMax development and could potentially provide some competition for 4G (LTE). The window will be closing, so it'll be interesting to see how this goes.

[aplnub]

I would think at the very least Apple will stay tied to AT&T for a minimum of 12 months. After 12 months rolls by, I wouldn't be surprised if Verizon got friendly with Apple. 24 months after the release of the 3G iPhone would seem more practical for a cut in one carrier only practice.

At this point, I am not sure what Apple is thinking about having their phone tied to one carrier. I don't see the value added in doing this, even if it means no visual voice mail.

[aplnub]

Originally Posted by Rot'nApple

If you are required to sign up for a two year att agreement then and there whether purchasing the 3G iphone from an att or apple retail store, does that mean they will be doing the same standard practices across the world? Can you buy an iPhone from overseas? Or will you be tied in with the "carrier" representing that country and have to sign up for and pay for their plans as well.

Why would I want to buy a phone and have to sign up for a contract then and there then go home and "jailbreak" to go use some other carrier? I still would be receiving a monthly minutes bill from the carrier I don't want to be with, wouldn't I???

Have you thought that Apple doesn't want you jail breaking the phone to begin with? Just an observation.

[SpamSandwich]

Originally Posted by Rot'nApple

If you are required to sign up for a two year att agreement then and there whether purchasing the 3G iphone from an att or apple retail store, does that mean they will be doing the same standard practices across the world? Can you buy an iPhone from overseas? Or will you be tied in with the "carrier" representing that country and have to sign up for and pay for their plans as well.

Why would I want to buy a phone and have to sign up for a contract then and there then go home and "jailbreak" to go use some other carrier? I still would be receiving a monthly minutes bill from the carrier I don't want to be with, wouldn't I???

They are obviously trying to rope in new customers that have been lost to jailbreaking. I think they are going about this in the wrong way. They are not providing customers with a service they want, which is THEIR CHOICE of service for iPhone. Bloody heck.

[tjp091]

Since ATT just anounced that Apple will no longer have revenue sharing with ATT, and will be just like any other equipment providor, I don't see how ATT can keep Apple from selling the iPhone to other carriers.

[Zandros]

Originally Posted by Rot'nApple

If you are required to sign up for a two year att agreement then and there whether purchasing the 3G iphone from an att or apple retail store, does that mean they will be doing the same standard practices across the world?

This is already standard practice in the rest of the world.

/Adrian

[Virgil-TB2]

Wow. This is starting to look like a series of stunningly stupid moves from Apple.

I have been drooling over the iPhone for close to two years, just waiting and waiting for it to be available in my area. I was so set to buy one I almost went downtown to the Apple store in case it went on sale today, but now I am not sure I will even buy one at all.

I went from "mildly disappointed" just after the keynote, to WTF?, to "probably won't buy one now."

Aside from the disappointing, "hardly-changed-at-all" hardware feature set and the "not much in it for non corporate users" software update, now I *won't* be able to buy it online and I *won't* be able to use it at all without selling my soul to the local Telecom monopoly?

This whole scenario is so "un-Apple," so greedy, and so totally, totally lame I am speechless.

My last ace-in-the hole position was that I could buy the thing and not use the phone part and still be happy, now I don't even have that? WTF is Apple thinking here? I feel cheated.

[johnqh]

Originally Posted by Virgil-TB2

This whole scenario is so "un-Apple," so greedy, and so totally, totally lame I am speechless.

My last ace-in-the hole position was that I could buy the thing and not use the phone part and still be happy, now I don't even have that? WTF is Apple thinking here? I feel cheated.

You want Apple to sell you a piece of hardware, below (or at cost), and thank you for it?

There is always iTouch. Stop whining.

[johnqh]

Originally Posted by tjp091

Since ATT just anounced that Apple will no longer have revenue sharing with ATT, and will be just like any other equipment providor, I don't see how ATT can keep Apple from selling the iPhone to other carriers.

The revenue sharing contract is gone, that doesn't mean there isn't any contract. Most likely, Apple gets a flat amount for every iPhone sold, and in return, have to make buyer sign the contract.

Without contract, iPhone would cost $600 to $800 (unlocked), just like other SmartPhones.

[stukdog]

I don't mind the contract or the carrier...I just like the convenience of doing it at home.

Bummer.

[samab]

Originally Posted by tjp091

Since ATT just anounced that Apple will no longer have revenue sharing with ATT, and will be just like any other equipment providor, I don't see how ATT can keep Apple from selling the iPhone to other carriers.

AT&T remains the exclusive iphone provider in the US.

http://www.att.com/gen/press-room?pi...rticleid=25791

[VinitaBoy]

@Virgil

Good Gawd, dude, get one of those Paul Harvey "pay-as-you-go" disposables and call it a day. (As long as you stay in very, very large metropolitan areas, you'll be fine.) Clearly, the iPhone is NOT for you; and just as clearly, YOU are not the customer Apple is looking for.

[Infinitywraith]

Do you realize that the reason they're restricting purchasing is because otherwise you'd be able to get a $200 iPod Touch by jailbreaking it?

[JeffDM]

Originally Posted by Virgil-TB2

My last ace-in-the hole position was that I could buy the thing and not use the phone part and still be happy, now I don't even have that?

The original iPhone wouldn't do much either until you either hacked it or signed up for ATT service.

WTF is Apple thinking here? I feel cheated.

Cheated? You haven't even bought the thing! I'm wondering WTF you are thinking here.

[Step]

I don't know about "series" of stupid moves, but I have to agree with Virgil that I am very, very disappointed about this latest development. I have a first-gen iPhone, and was already planning a move up to the second-gen (with my wife getting my first-gen). Unlike Virgil, the enterprise and other features are very enticing to me, and I would definitely enjoy speedier data access and GPS.

However, having to activate in the store just rubs in the already uncomfortable compromise I've made in accepting AT&T as a carrier. So far, the experience has been only tolerable (far from exemplary), and the pricing is just plain expensive.

At least the option to ditch, unlock, and go to another carrier existed (even if I didn't exercise that right). Now they've removed that? Not sure I can accept that, as much as I appreciate both Apple's technology and their brilliant business and technological moves here. Simply put, the US' telecom situation is really pathetic.

[Infinitywraith]

Originally Posted by Step

At least the option to ditch, unlock, and go to another carrier existed (even if I didn't exercise that right). Now they've removed that? Not sure I can accept that, as much as I appreciate both Apple's technology and their brilliant business and technological moves here. Simply put, the US' telecom situation is really pathetic.

Or, like me, you just want an iPod Touch. If this in-store activation didn't happen I'd be able to just save $100 on my iPod Touch.

[stonefree]

Originally Posted by JeffDM

Cheated? You haven't even bought the thing! I'm wondering WTF you are thinking here.

LOL. It's for discussions like this that make browsing this forum worthwhile.

[balsi]

Originally Posted by samab

AT&T remains the exclusive iphone provider in the US.

http://www.att.com/gen/press-room?pi...rticleid=25791

The original agreement was a 5 year exclusive with ATT which included revenue sharing. The question is whether that has been revised along with the revenue sharing amendment. I would think it isn't. In my mind, the point of the five year contract as apple saw it was to get to LTE, the CDMA chipset is more expensive and doesn't cross national borders well since a majority of the rest of the world is on GSM. With LTE Verizon and ATT are on the same platform as is the rest of the world, and I'd bet they go carrier-agnostic at that point. LTE is supposed to be 2012, probably more like 2013-2014 from what I'm hearing.

With the emergence of Android as what looks to be a decent operating system the world has changed a little bit from when the iPhone was launched. Now Apple needs to get as many phones into as many hands as possible, which means they need ATT to be incentivized to sell as many of the phones as possible to establish dominance as a platform which also entails developing the iPhone ecosystem etc.

Looking at the math, rumor was that Apple took $10 in ARPU for each iPhone customer, so in essence they took $240 over the contract of a customer. I'd assume that the subsidy that ATT gives is about that much now, and if I made a bet, contractually they have to give that much because Apple wants the guarantee that the iPhone would be competitive with every other smartphone that comes out. ATT is making the bet that iPhone customers won't by a new iPhone every 2 years and that even if they do they'll stay with ATT service (the cost to retain a customer is less than the cost to acquire a new customer to your service) and therefore they come out ahead.

Apple was really challenging the status quo with the revenue sharing deal before, now they've fallen in line with the rest of the industry which in my mind is not unexpected. There's more to this than I've outlined where the handset manufacturers are likely to have more power in the future years, but I'll save that for another diatribe.

I wrote this quickly, I apologize if there are non-sequiters (sp) or gaps that I don't fully explain

[davidwisconsin]

WTF! Apple, I been waiting a year to get an iphone, so now I have to stand in line for 8 hours hoping when I get to the counter that they are not sold out or the store is closing, I dont think so, what were you thinging when dropping sales from the Apple online store? that is the worst idea ever.

so what is the next best phone out there since it looks like i can not get an iphone.

[polvadis]

I just really want Verizon to stop making its users buy their "iPhone killers" and start simply supporting the iPhone. I really don't like AT&T's service and it doesn't get any reception in my apartment while my Verizon phone gets full bars.

I know that Verizon is on a different network so it's not that easy to get iPhone to play nice with it, but can anyone imagine the millions of $$$ it would pay off if Verizon would get the iPhone already? I know it would have my $199...

[Dunks]

Originally Posted by davidwisconsin

WTF! Apple, I been waiting a year to get an iphone, so now I have to stand in line for 8 hours hoping when I get to the counter that they are not sold out or the store is closing, I dont think so, what were you thinging when dropping sales from the Apple online store? that is the worst idea ever.

so what is the next best phone out there since it looks like i can not get an iphone.

would it kill you to wait a week or so before buying one?

[davidwisconsin]

Originally Posted by Dunks

would it kill you to wait a week or so before buying one?

and you think the lines are going to be down in a week? We only have two Apple store in wisconsinand very few at&crap stores. the closest apple store or at&crap store is over an hour away

[djames42]

Originally Posted by Infinitywraith

Do you realize that the reason they're restricting purchasing is because otherwise you'd be able to get a $200 iPod Touch by jailbreaking it?

No. The $199 subsidized price is had with a two-year contract. You either get the privilege of paying $60/month (which turns your "iPod Touch" into a $919 device), or you break the contract (which then means you've paid about $400-500). The other two alternatives are paying the non-contract price of $399 and jailbreaking it, or simply buying the touch

[backtomac]

Originally Posted by SpamSandwich

In other significant news... Cisco, Intel, Alcatel-Lucent, Clearwire, Samsung and Sprint have formed a WiMax patent pool.

http://www.networkworld.com/news/200...orm-wimax.html

This will speed WiMax development and could potentially provide some competition for 4G (LTE). The window will be closing, so it'll be interesting to see how this goes.

I hope Wimax can get up and running. It will provide some healthy competition in the market place. But they need to get moving and get established well before LTE gets rolled out because it looks to be the stronger technology.

[stellaclose]

I think they'll have online sales after the launch on July 11...they did the same thing at the original launch last year.

No initial online sales means camping out, big lines and extra media attention......

[dmgceo]

If it has to be activated in the store then how do you buy a 3G iPhone from the apple ONLINE store ????

[akhomerun]

this is a no brainer. i don't know why some of you are complaining.

the edge iphone wasnt subsidized. that's why you could activate at home.

the $199 3G iphone is subsidized. therefore you have to activate it upon purchase just like every other subsidized phone in the US.

[samab]

Originally Posted by balsi

The original agreement was a 5 year exclusive with ATT which included revenue sharing. The question is whether that has been revised along with the revenue sharing amendment. I would think it isn't.

Did you even read the AT&T press release that I cited?

It specifically said that AT&T is the exclusive provider of the 3G iphone in the US.

AT&T said that it will take a hit on earnings for the next 2 years by about 10-12 cents a share.

AT&T also said that they won't be making money of this deal until 2010 --- so at the very least the exclusive agreement goes beyond 2010 to make any sense for them.

[Step]

"There's more to this than I've outlined where the handset manufacturers are likely to have more power in the future years, but I'll save that for another diatribe.".

Balsi, could you elaborate? I'm definitely interested in seeing the telecom companies lose some power here so we can see more competitive markets. But what points in that direction? Apple, for all it's market-shaking brilliance, still has to cave to the "status-quo" - at least that's what it looks like to me. Of course they're ruled (as any public company) by the almighty dollar, and they have to go where the money leads. That doesn't mean I have to agree or like it though.

[Jensonb]

Originally Posted by aplnub

I would think at the very least Apple will stay tied to AT&T for a minimum of 12 months. After 12 months rolls by, I wouldn't be surprised if Verizon got friendly with Apple. 24 months after the release of the 3G iPhone would seem more practical for a cut in one carrier only practice.

At this point, I am not sure what Apple is thinking about having their phone tied to one carrier. I don't see the value added in doing this, even if it means no visual voice mail.

Let's address this one more time:

CDMA is a dead in the water system which has very little usage outside the US. Furthermore, it's usage is shrinking. Apple are extremely unlikely to ship a CDMA iPhone and by extension a VeriZon one.

[dagamer34]

Originally Posted by tjp091

Since ATT just anounced that Apple will no longer have revenue sharing with ATT, and will be just like any other equipment providor, I don't see how ATT can keep Apple from selling the iPhone to other carriers.

Oh, I guarantee you revenue sharing is going on. The iPhone did not just suddenly shed $200 of its price from nowhere, making it cheaper than even the iPod Touch. The key is in that $10 increase. Because $10 over 24 months = $240, add that to the $199-$299 you'll pay for an iPhone 3G and you'll see that they've actually managed to INCREASE the price by $40! But for those that don't do the math, you'll get roped in!

And when I saw the cheaper price and noticed that the iPod Touch hadn't decreased in price when the Apple Store went back up, I knew something was off.

The other thing is with activations now in the store, does this mean that iTunes will be pulling activation records from the web if you ever have to restore the iPhone OS firmware? Because that would royally suck if you have to go to the store every freaking time just to activate the phone.

[Cory Bauer]

I imagine by July 11th or shortly after you'll be able to purchase an iPhone 3G from the online Apple Store, but activating the phone will be part of the ordering process. If you can't buy the iPhone anywhere without signing a 2-year contract, then that'll certainly put an end to jailbreaking.

[JeffDM]

Originally Posted by Jensonb

Let's address this one more time:

CDMA is a dead in the water system which has very little usage outside the US. Furthermore, it's usage is shrinking.

There are more CDMA subscribers outside the US than inside. Despite your contention, its usage is growing.

[samab]

Originally Posted by dagamer34

Oh, I guarantee you revenue sharing is going on.

It's in the Apple's SEC filings --- no revenue sharing.

[MiMiC]

Originally Posted by dagamer34

The other thing is with activations now in the store, does this mean that iTunes will be pulling activation records from the web if you ever have to restore the iPhone OS firmware? Because that would royally suck if you have to go to the store every freaking time just to activate the phone.

Yeah, because i totally restore my iPhone a couple time a week.

[MiMiC]

Originally Posted by Cory Bauer

I imagine by July 11th or shortly after you'll be able to purchase an iPhone 3G from the online Apple Store, but activating the phone will be part of the ordering process. If you can't buy the iPhone anywhere without signing a 2-year contract, then that'll certainly put an end to jailbreaking.

I'm more concerned about my current iPhone and how easily it will be to pass onto mom on July 12.