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AT&T bumps iPhone 3GS price to 99 cents

post #1 of 52
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After making the iPhone 3GS free with contract last month, AT&T has now raised the price of Apple's two-year-old smartphone to $0.99.

The iPhone 3GS was originally announced as free with a two-year contract during Apple's iPhone 4S unveiling in October. MacNN reported on Friday that AT&T has now bumped up that price to 99 cents.

"iPhone 3GS is still available at an incredibly low price and we're confident consumers will agree that this remains one of the best deals for a leading smartphone," the company said in a statement.

The second-largest wireless carrier in the U.S. has been the exclusive seller of the iPhone 3GS since it arrived in 2009. Sales of the handset have remained surprisingly brisk even after more than two years on the market. According to the NPD Group, the iPhone 3GS was the second-best-selling smartphone in the U.S. during the third quarter of this year, behind only its successor, the iPhone 4.

The reason for AT&T's minor price hike remains unclear. In the past, Apple has, however, asked its partners not to advertise its products as "free" during promotions in order to prevent its brand from being diluted. It's possible that the iPhone maker had a change of heart about the iPhone 3GS deal and asked for a nominal fee to be put in place.



Another explanation could be the existence of an obscure accounting rule that would require a token payment for the device. For example, Apple in the past had to adjust its accounting of the iPhone to a subscription method in order to steer clear of laws and policies put into place after the Enron scandal. There's no indication that this is the case for the iPhone 3GS, however, and offers of free phones on contract have long been a practice among wireless carriers.

It has also been suggested that the new price is meant to curb overwhelming demand, but it seems unlikely that the extra $1 would deter many prospective customers.
post #2 of 52
This is the most disgusting thing I've ever seen.

How stupid could they possibly be? Are they really that desperate for money?

Zero dollars from Apple. $0.99 from AT&T.

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post #3 of 52
Quote:
Originally Posted by Tallest Skil View Post

This is the most disgusting thing I've ever seen.

Really? Really?

Come on though, really?

There's hyperbole and there's ridiculous, I fear you may have drifted into the latter. It's unquestionably bizarre, pointless & stupid. But disgusting - let alone the most disgusting thing you've ever seen? Come on.

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post #4 of 52
Quote:
Originally Posted by Jensonb View Post

There's hyperbole and there's ridiculous

Ridiculous is that you took me literally. There's really not much more to say than that.

Would you be appeased if I amended 'thing' to 'display of blatant money-grubbing'?

Originally posted by Marvin

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Originally posted by Marvin

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post #5 of 52
lol to diluting the brand for saying its 'free'

like a lot of iphones around the world.

99cents is a waste of time
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post #6 of 52
Quote:
Originally Posted by Tallest Skil View Post

This is the most disgusting thing I've ever seen.
How stupid could they possibly be? Are they really that desperate for money?
Zero dollars from Apple. $0.99 from AT&T.

Calm down kiddo. There is obviously a legality involved here. It's probably some obscure thing - who knows what - but considering that AT&T hopes to buy T-Mobile, they're probably being over cautious about something. Think for a moment about how irrelevant that one dollar is in comparison to what they get out of a 2 year contract, especially since most contracts end with the beginning of another lengthy contract.
post #7 of 52
Lol, first I thought it said $99!
post #8 of 52
If it's what I think it is, it probably has to do with subsidy accounting.

In California, you pay the full tax even on "free" stuff. If the device is being accounted as 0.99$ then maybe they've found a loophole. Or maybe they get too many customers asking why their free phone suddenly isn't.

Tip: Figure out how much the phone really costs AT&T from the tax charged.
post #9 of 52
Quote:
Originally Posted by Misa View Post

If it's what I think it is, it probably has to do with subsidy accounting.

In California, you pay the full tax even on "free" stuff. If the device is being accounted as 0.99$ then maybe they've found a loophole. Or maybe they get too many customers asking why their free phone suddenly isn't.

Tip: Figure out how much the phone really costs AT&T from the tax charged.

This is the most likely explanation. The Taxman cometh.

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post #10 of 52
Quote:
Originally Posted by SpamSandwich View Post

This is the most likely explanation. The Taxman cometh.

Yea that was my though as well...
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post #11 of 52
Quote:
Originally Posted by DaveGee View Post

Yea that was my though as well...

It's almost certainly due to this issue:
http://articles.cnn.com/2011-04-27/u...uling?_s=PM:US

"A divided Supreme Court gave a big victory Wednesday to business interests, ruling that a cell phone carrier's arbitration clause in contracts that ban larger class-action lawsuits is permissible.

The 5-4 ruling along ideological lines stopped a claim over whether an AT&T cell phone was falsely advertised as "free." The plaintiffs wanted to bring others into a larger putative class action.

At issue was whether federal law has sway over-- or "pre-empts"-- state contract laws. Several states have tossed out many class-action barriers by businesses as "unconscionable" and therefore unenforceable."


Tho dodged by a narrow court victory, by avoiding "free" in the phone pricing it may keep the issue under control. Expect to see the same with ATT's other "free" phones if this is the case.
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post #12 of 52
They must have made a mistake at the start. It was free. It still is free at the on line Apple Store. 99 cents. Sounds so stupid to me. What is 99 cents gonna do? Why pay 99 cents when you can get it for free at apple.com. How can apple approve ATT selling it for that?
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post #13 of 52
Quote:
Originally Posted by tylerk36 View Post

They must have made a mistake at the start. It was free. It still is free at the on lie Apple Store. 99 cents. Sounds so stupid to me. What is 99 cents gonna do? Why pay 99 cents when you can get it for free at apple.com. How can apple approve ATT selling it for that?

See the post right above yours. . .
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post #14 of 52
Quote:
Originally Posted by Gatorguy View Post

It's almost certainly due to this issue:
http://articles.cnn.com/2011-04-27/u...uling?_s=PM:US

The primary complaint in that case was the fact that the people were charged full sales tax on a phone that was "free." The full sales tax issue wouldn't go away if the price was changed from free to 99 cents so I am not sure the new 99 cent thing is related to that case.

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post #15 of 52
i was going to get a 3GS for free but now that it's .99, forget about it.
post #16 of 52
Quote:
Originally Posted by Tallest Skil View Post

This is the most disgusting thing I've ever seen.

How stupid could they possibly be? Are they really that desperate for money?

Zero dollars from Apple. $0.99 from AT&T.

i'm portuguese. how can you buy it at apple's site for free? if i want one, i must pay 350. 80% of the portuguese workers earn 450 per month.
post #17 of 52
I just got this for my wife today. She has a really basic AT&T Non-smartphone that is horrible so this will be a big upgrade for her. With tax I paid $33 plus there is an upgrade charge of $18 that will appear on the bill. She should be very happy to get this.
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post #18 of 52
Quote:
Originally Posted by pedromartins View Post

i'm portuguese. how can you buy it at apple's site for free? if i want one, i must pay 350€. 80% of the portuguese workers earn 450 per month.

Hello! And the Portuguese equivalent thereof!

Unfortunately, Apple has yet to release the iPhone 4S in Portugal.

This means that Apple's old price levels are still in effect on the Portuguese Apple Online Store.

In the United States and several other countries, the iPhone 3GS is now free. The iPhone 4 costs the old price of the iPhone 3GS. The iPhone 4S, then, costs the old price of the iPhone 4.

Sadly, you'll have to wait for the iPhone 4S to be released in Portugal to see the iPhone 3GS drop down to being free on contract.

It would be nice if Apple dropped prices in every store in every country simultaneously (even if the products that caused said price drops hadn't been released yet), but they don't.

Originally posted by Marvin

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Originally posted by Marvin

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post #19 of 52
The charge .99 for the same reason they charge $99.99 for iPhone 4 and $199.99 for the iPhone 4s. It's because they are the scum of the earth and can ream you for an extra buck if you're not near an Apple Store. Best Buy also adds an extra 99¢ to all Apple products because they are also scumbags.
post #20 of 52
Quote:
Originally Posted by halhiker View Post

The charge .99 for the same reason they charge $99.99 for iPhone 4 and $199.99 for the iPhone 4s. It's because they are the scum of the earth and can ream you for an extra buck if you're not near an Apple Store. Best Buy also adds an extra 99¢ to all Apple products because they are also scumbags.

I'm pissed off. Costing the same price as a bag of Chili-Cheese Fritos. How does Apple expect us to feed our families?
post #21 of 52
Quote:
Originally Posted by halhiker View Post

The charge .99 for the same reason they charge $99.99 for iPhone 4 and $199.99 for the iPhone 4s. It's because they are the scum of the earth and can ream you for an extra buck if you're not near an Apple Store. Best Buy also adds an extra 99¢ to all Apple products because they are also scumbags.

Woa there, horsey! Or maybe it has something to do with ruling that Gatorguy mentioned. If not, this sounds a lot like a Sarbanes-Oxley sorta thing they might have to do to protect their asses. Something similar happened when iOS 2.0 came out they charged a nominal fee to upgrade.

And seriously, is a dollar something to get worked up over?? Especially when someone is going to drop around 2 grand to honor the terms of their phone contract?? Geeez, calm down ppl.
post #22 of 52
Quote:
Originally Posted by One Fine Line View Post

Woa there, horsey! Or maybe it has something to do with ruling that Gatorguy mentioned. If not, this sounds a lot like a Sarbanes-Oxley sorta thing they might have to do to protect their asses. Something similar happened when iOS 2.0 came out they charged a nominal fee to upgrade.

And seriously, is a dollar something to get worked up over?? Especially when someone is going to drop around 2 grand to honor the terms of their phone contract?? Geeez, calm down ppl.

We are the .99 and this will not be tolerated.
post #23 of 52
Quote:
Originally Posted by jd_in_sb View Post

The primary complaint in that case was the fact that the people were charged full sales tax on a phone that was "free." The full sales tax issue wouldn't go away if the price was changed from free to 99 cents so I am not sure the new 99 cent thing is related to that case.

the full sales tax issue would stay the same sure. But the issue was that it said 'free' not 'you only pay sales tax'

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post #24 of 52
Explanation from a Mac Rumors reader:

Quote:
I work at AT&T, This is being done to help prevent fraud as the .99 cents cannot be billed to your bill. It must be charged to a credit or bank issued debt card. Fraudsters are using stolen identities to steal these handsets ....been an issue since they went free

http://www.macrumors.com/2011/11/18/...price-to-0-99/
post #25 of 52
Quote:
Originally Posted by charlituna View Post

the full sales tax issue would stay the same sure. But the issue was that it said 'free' not 'you only pay sales tax'

Ah.. I see the issue more clearly now. Thanks for pointing it out. The word "free" can create quite a headache! Sounds like all their free phones might soon become 99 cents.

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post #26 of 52
Those greedy bastards. Don't they know, $0.99 is like a two-week salary in a North Korean labor camp? How how will the residents of Gulag 19 afford an iPhone? Looks like they'll have to settle for a free Android phone...the horror.

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post #27 of 52
In regard to buying from a carrier. The 3GS is actually the first time that an iPhone has cost anything in Australia.

You can get a 4s or 4 for free but you pay $429 for a 3GS. Granted it is on prepaid not plan but still since the 3G was released no iPhone has cost anything
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post #28 of 52
Quote:
Originally Posted by cy_starkman View Post

In regard to buying from a carrier. The 3GS is actually the first time that an iPhone has cost anything in Australia.

You can get a 4s or 4 for free but you pay $429 for a 3GS. Granted it is on prepaid not plan but still since the 3G was released no iPhone has cost anything

What a load of crap - yes it has. The opposite of what you state is true. When the original iPhone came out for instance many people were paying $16 per month for it over a 2 year contract. This was on top of the plan price of $50 per month or what have you. Just because this fee is added to your bill rather than being paid "upfront", doesn't mean it isn't there.

That is still the case to this day (please check the phone plans before commenting). On the higher dollar plans, the phone will be "free", on the mid to lower tier plans the phones are NOT "free".

And, of course, if one wishes to pre-pay, they could have bought an iPhone 3gs, an iPhone 3g an iPhone 4 or an iPhone 4s outright ... there is nothing special about the 3gs pricing in Australia as you have suggested ...
post #29 of 52
Quote:
Originally Posted by Tallest Skil View Post

Hello! And the Portuguese equivalent thereof!

In the United States and several other countries, the iPhone 3GS is now free. The iPhone 4 costs the old price of the iPhone 3GS. The iPhone 4S, then, costs the old price of the iPhone 4.

Sadly, you'll have to wait for the iPhone 4S to be released in Portugal to see the iPhone 3GS drop down to being free on contract.

It would be nice if Apple dropped prices in every store in every country simultaneously (even if the products that caused said price drops hadn't been released yet), but they don't.

You are wrong..in most countries telcos do not offer subsidized phones - you have to pay full price.

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post #30 of 52
Really!

This is a story?
post #31 of 52
Quote:
Originally Posted by linkgx1 View Post

I'm pissed off. Costing the same price as a bag of Chili-Cheese Fritos. How does Apple expect us to feed our families?

ROFL
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post #32 of 52
Quote:
Originally Posted by kent909 View Post

really!

This is a story?

Really.
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post #33 of 52
Quote:
Originally Posted by Mazda 3s View Post

Explanation from a Mac Rumors reader:



http://www.macrumors.com/2011/11/18/...price-to-0-99/

This is most likely the truth, or at least some part of it. Ask literally any LP (loss prevention) guy that works retail and they'll tell you how big of a problem this sort of thing is.
post #34 of 52
Quote:
Originally Posted by Tallest Skil View Post

Ridiculous is that you took me literally. There's really not much more to say than that.

Would you be appeased if I amended 'thing' to 'display of blatant money-grubbing'?

I searched for any hint of irony and found none, but whatever you say.

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post #35 of 52
Quote:
Originally Posted by Mazda 3s View Post

Explanation from a Mac Rumors reader:



http://www.macrumors.com/2011/11/18/...price-to-0-99/

You mean I can't pay that .99 in cash?
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post #36 of 52
Wow. If this is the most disgusting thing you have ever seen, you have lived a pretty sheltered life. I am not sure to feel happy or sad for you.

As at least one other person pointed out, AT&T is obviously doing it to cover themselves for some reason, not to make ninety nine cents. It would be nice for AT&T to voice the reason, but it probably has reasons for doing that. I remember when Apple charged iPod Touch users some nominal fee to upgrade peoples' OS, and people went nuts even though Apple was doing it to comply with some accounting rules.


I suspect the MacRumors' poster is correct. People are signing up for free iPhones, AT&T or Apple is shipping them, and some people are taking them without paying the contract fee, which in turn AT&T has to pay Apple for the phone. AT&T is making people provide a credit card account to pay the fee, and actually charging the fee verifies the account is legitimate.


PS:

Don't get me wrong, from my experience AT&T is a disgusting money grabbing company that sells you out whenever it can.

Quote:
Originally Posted by Tallest Skil View Post

This is the most disgusting thing I've ever seen.

How stupid could they possibly be? Are they really that desperate for money?

Zero dollars from Apple. $0.99 from AT&T.
post #37 of 52
I'd say that is you can complain about 99 cents as if the world is ending your life must be pretty well protected. Unlike most of us, a one time 99 cent cost is pretty forgetable unless you just have to be angry about something.
post #38 of 52
Quote:
Originally Posted by linkgx1 View Post

I'm pissed off. Costing the same price as a bag of Chili-Cheese Fritos. How does Apple expect us to feed our families?

Small difference! The bag of Chili-Cheese Fritos doesn't come with a 2 year contract.
post #39 of 52
Quote:
Originally Posted by linkgx1 View Post

we are the .99 and this will not be tolerated.

lol
+1
post #40 of 52
America: Land of the 0.99c.
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