AT&T backtracks, offers break on new iPhone pricing

AT&T said it will reverse course and offer the iPhone 3G S at new-customer prices to some current iPhone 3G owners starting Friday, a move apparently geared to mollify a large, vocal and potentially valuable subset of the carrier's customers. AT&T initially resisted the move, presumably due to concerns over recouping the millions of dollars it spends subsidizing the cost of the high-end gadget.

Announced earlier this month, the new iPhone 3G S features increased performance speeds and other tweaks, and is set to be available Friday to new customers for $199 for the 16 GB version and $299 for the 32 GB version. AT&T initially said that current iPhone 3G owners would have had to pay $399 for the 16GB version and $499 for the 32GB version because they were not yet eligible for the new-customer price. The carrier said it has a formula to calculate when it has recouped its iPhone subsidy: IPhone customers who spend more than $99 a month per line generally are eligible for an upgrade between 12 and 18 months into their contract.

Thus, under that formula, those who purchased the iPhone 3G wouldn't be eligible for the fully subsidized iPhone 3G S price of $199 until July at the earliest.

However, the carrier announced on its Facebook page that it will offer, for a limited time, the fully-subsidized iPhone 3G S price starting Friday to subscribers who would have been eligible for an upgrade in July, August or September under the previous setup.

"All of that said, we've been listening to our customers," the company wrote on its Facebook page. "And since many of our iPhone 3G customers are early adopters and literally weeks shy of being upgrade eligible due to iPhone 3G S launching 11 months after iPhone 3G, we're extending the window of upgrade eligibility for a limited time."

AT&T said that customers who are eligible for the upgrade but have already pre-ordered an iPhone 3G S from an AT&T store will have the price of the device adjusted when they pick it up. If customers who are eligible for the new upgrade offer pre-ordered the device with AT&T online, the carrier said it will send the customer an email and issue them a credit.

For more:
- see this AP article
- see AT&T's Facebook page

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