"upgrade eligible" is the keyword.. for gen1 iphone users, the prices, as per the att/iphone website, calculated on the basis of my contract specs was the same as advertised, i.e., 99/199/299

edit: chk price eligibility here- https://buyiphone.apple.com/

Thanks for the link. Sadly it's not working right now.

I guess if AT&T and "not being able to connect" weren't synonymous in my head already it's my own fault for being surprised.

Update: Finally got through and I take back all the bad things I said about AT&T. I got the $299 pricing for the 32Gb and I bought my 1gen iPhone on Sept. 5, 2007 (I know the exact date because it was the date they dropped the price and I ran out and picked one up that day)

Just verified this. I have an original 2G iPhone and was able to reserve the new 32GB 3GS for $299.

Thanks for that link.

This is the way that it is with every phone on the market. If you aren't ~22 months into your contract, you can't upgrade devices at the subsidized price. Likewise, if you aren't upgrade eligible on Sprint, the Palm Pre is going to cost you $550 ($50 more than the iPhone 8GB unsubsidized).

It might be crappy, but this is the way that subsidized devices work. You have to wait nearly two years before you can upgrade or you have to pay the unsubsidized price.

Apparently it's not (though I concede it often is like that). From the linked article...

UPDATE So this is what AT&T tells us:

An iPhone 3G customer in most cases can early upgrade at $399 [16GB] or $499 [32GB].

You’ll note that that’s still several hundred dollars more than what Joe Smoe would have to pay, right off the street, if he doesn’t already have an AT&T account.

No, Joe Shmoe is "paying" more than $299 for the phone; he's just paying over the long haul, with a new contract commitment to AT&T. AT&T already has your contract commitment. You have nothing to offer them but cash.

I am at the end of my AT&T contract (non-iPhone), and their website wants to charge me more for a new phone than new customers would pay. Unfortunately for them, I am just going to transfer my number to T-Mobile when the G2 comes out. Fuck AT&T. (And if T-Mobile pulls this on me, there is still Sprint and Verizon.)

No it's not the case actually. I upgraded from my 2G to 3G without any penalty. With the iPhone, which is what we're talking about here, that's not the way it works or should work. Also keep in mind, the 3G[s] isn't a huge leap.

The 2G to 3G was without penalty because the 2G devices were unsubsidized.

You can say that again, I paid a pretty penny for my 2G which is why I ignored the 3G. Glad I waited... 2G was good to me though, never had a drop call.

Very valid point. It's still pretty screwy to play: don't subsidize, subsidize, don't subsidize.

I don't understand. The phone costs what it costs. Would you rather AT&T didn't subsidize? I'm happy that they did for me.

The party that seems to actually be dishonest here is Apple, since the true price of their phone is nothing like what they put in the Keynote slide.

It has always enraged and perplexed me that instead of a better deal, returning customers get the worst possible deal when it comes to wireless service. I get it: you sell the phone cheaper to get people roped into contracts that they have to cancel for more than the adjusted cost. But why screw over existing customers? That doesn't really seem like a sane way to keep one's business.

Your best bet is to sell your 16GB 3G on ebay (maybe for $300? I sold mine for $450 2 months ago). Eat the $175 cancellation fee and switch to a no contract carrier for a few weeks. Then You can re-up with AT & T for a 32GB 3GS for $300. Your net cost... $175 plus tax on the $300.

Hardly seems worth the hassle. Plus, they're offering me the upgrade to 32GB 3GS (from 3G I've been on less than 1 yr) for $499, so seems like it'd be better just to sell the old phone for our theoretical $300 and pay the $200 difference.

Seems weird to get upset at AT&T about this. It's Apple that's being dishonest about the prices. The super low iPhone prices are subsidized. If AT&T already subsidized a phone for you, isn't it hard to argue that they owe you another one?

My wife has a 2G and I have a 3G. She is eligible for the $200 16GB 3GS, my cost is $400.

If she gets a 3GS, what is the cost if we then switch phones?

We're on the family plan.

You can't just swap SIM cards? I was thinking about doing the same thing.

Hmm... http://forums.macrumors.com/showthread.php?t=713873

I can't believe tech affine bloggers can be this clueless.

Hint: there is no such thing as a free lunch.

What are the data plans like? Does anyone know if you must buy a plan with the $99 iPhone?

Data plans are $30/mo for unmetered use, limited only by how much network AT&T deploys. It varies from mind bogglingly fast to completely unusable for even trivial functions.

I don't know if you can opt out of the data plan, but I expect there are things that will break if you do, like visual voice mail.

Techcrunch spreading FUD?

Color me surprised...

Why not focus on the good stuff?

Why it always have to be downplaying everything cool about what they don't like, or get paid to do so?

Tethering not good enough?

The much asked for Copy/Paste ok with them?

Fuck, iPhone is sooooo expensive you better get a zune phone, whenever that piece of crap is available.