Tuesday, June 16, 2009

The bitter sweet deals of the new iPhone 3G [S]

Ever since the new pricing plans to get iPhone 3G [S] have been laid out at (and after) its presentation on WWDC '09 by Apple's current acting CEO Phil Schiller, there have been many voices raised to show disapproval of the upgrading plans from old models to the new one.

In its official statement, Apple says the new 16GB iPhone 3G [S] will costs only $199 and the 32GB is $299, while the old 8GB iPhone 3G is now only costs $99. Sounds very tempting, but the catch is you gotta be a new AT&T subscriber. For you who are not, who already own an iPhone and an on-going subscription with it, you'll have to fork out more dimes and dollars from your pocket to upgrade to the newest model.

Previously, an AT&T spokesman said that to upgrade the 8GB iPhone 3G will costs $299, the 16GB iPhone 3G [S] is $399, and the 32GB iPhone 3G [S] costs $499. In addition, AT&T subscribers will have to pay an $18 upgrade fee. Plus only if AT&T deems eligible the subscribers for an upgrade, which depends largely on how far along they are in their contract. Does that sound not too shabby for you? Well, since the upgrade price differ from each subscriptions, it is hard to say that it is fair and square.

You'll probably won't say it is when you found out that you're paying more than you're expecting for, worst is you're paying more for less. Just like what Dr. Macenstein has found out when he plugged in all of his information into Apple's iPhone upgrade eligibility site and was offered this sweet deal: he can “UPgrade” his old 16GB iPhone 3G for a 8GB model (of the same iPhone 3G model) for only $300! ~LOL~ (see the screenshot below for better laugh)

Macenstein iphone upgrade

In general, we all think that AT&T is such a greedy company who wants to make a big profit from the new iPhone 3G [S] crazeness. Making the most of those who can't help themselves but to have the latest and the newest iPhone... But is it? Is AT&T really the one screwing with us? Apparently not according to Dr. Macenstein, who has done a little bit of math of his own. Here's a quick breakdown from his math theory:
  1. When you bought a 16GB iPhone 3G last year, AT&T actually paid Apple an extra $400 in subsidies for its price tag.
  2. If AT&T had to lay out the same subsidy on a new iPhone 3G [S] and all the other iPhone 3G customers now, before their contracts expired, AT&T would either have to lock them in for 4 more years to keep from losing money, or go bankrupt.
  3. AT&T is charging $699 for the iPhone 3G [S] without tied on a long-term contract, while Apple sells a 32GB iPod Touch for $399, that is around $300 in price difference. What iPod Touch got anything to do with iPhone? Because there are only few extra features of difference between the two devices that separates them, like the phone, camera and compass.
  4. Based on last year's iPhone 3G teardown has revealed it only costs under $100 to build an iPhone 3G, Dr. Macenstein arbitrarily pull the generous figure of $130 for the total cost of all the new things added to each iPhone (including the new chips for compass and faster processor).
  5. Subtract that arbitrary $30 figure from the difference in cost between the 32GB iPod touch and the 32GB iPhone 3G [S], so in the end we have $270 figure of extra cost that we give to Apple in order to get the new iPhone!
You may argue about the math up there, but Dr. Macenstein already stated that all of the figures above are subject to scrutiny and your usual criticism of how wrong he has it. ;-p

Naturally we know and realized it; that Apple is and always charging way too much for its products, not just the iPhone but also the Macs. And it's up to users on deciding whether or not it is worth it to pay for the "Apple-tax". Most of us will instantly try to weigh the "Apple-tax" based on comparison of the previous models with the new one, the specs and everything inside. But this is exactly where it gets a wee bit more tricky, since Apple is known to avoid talking about the actual tech specs of iPhone's guts.

Although Apple has openly described every new features in iPhone 3G [S] compared to older models, the company never mention the processor speed and how much RAM it has. Apart from how big the storage space available, Apple keeps specs for the iPods and iPhones to a minimum.

Jason Snell from Macworld wrote an excellent article that pointed out Apple’s reluctance to go into technical detail on most of its products as an extension of the company’s entire product-design philosophy:

"Apple excels at creating products that the general public likes because the company is driven by design, not by engineering. ...

Bad software is written by people who are experts at knowing how a computer works and how to write code to make it do what they want, but no idea about how regular people behave and how those people expect to interact with that software. ...

Apple’s the kind of company that makes decisions based on people, on users, and then challenges its engineers to find ways to fulfill those needs. ...

People don’t need to care that their iPhone has a 412MHz processor and 128MB or RAM — they just want to tap on an App and have it load fast. ...

But people who aren’t into this stuff — the 'not-we,' if you will—won’t care. And you know what? That’s okay. Because Apple’s right—most people shouldn’t care."

Jason then sat down with senior director of worldwide iPhone product marketing manager Bob Borchers, he was clear that “the usual speeds and feeds” aren’t the way Apple likes to talk about the iPhone.“Overall, it’s just a snappier experience. There are so many different facets to it — it’s just faster, better, quicker, snappier, and a great experience.”

But even though Apple is trying hard to avoid talking about geeky tech stuffs of its iPhone, they can't stop others from revealing all of the goodness inside of Apple's one and only smartphone. T-Mobile Netherlands website (via Macworld) has recently posted specifications for both the 16GB and 32GB of the iPhone 3G [S], the new iPhone is indeed powered by a 600MHz processor (compared to the 412MHz processor of the iPhone 3G) and sports 256MB of RAM (versus 128MB on the iPhone 3G).

T-mobile netherlands iphone specs

Apple's marketing philosophy is definetely different from other companies who love to boast of their products' hardware prowess, but then again that's what we love so much from Apple, because Apple is different. Just like Apple's famous ol' theme: "Think different..." ;-)

Talking about marketing strategy, AT&T also recently has revealed their plan to offer free MMS with a text-messaging plan at some point later this summer. Like David Martin from iPhone Atlas has reported: "Until now, some current customers have feared having to pay an additional fee for texting. Considering all the negative feedback about iPhone 3G to 3G S upgrades, this is probably a strategic decision on AT&T's part."

Atent mms faq

So, do you think you'll take that iPhone 3G [S] upgrade deals now? There'll be bitter sweet taste included in it, waiting for you take the first bite until the time for another new iPhone next year...

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