With rumours floating round the blogosphere that Apple may (finally) launch a 3G iPhone in the first half of next year, what happens if you’ve snapped up a first-generation model here in the UK on an 18-month contract? Under usual conditions, you wouldn’t be able to upgrade to another handset until at least 12 months in, which would be extremely frustrating if an all-new improved iPhone comes out in the meantime.
Mobile industry consultant Jon Mulholland reckons Apple and O2 have already got the problem licked, though, suggesting in an interview with SMS Text News that O2 will actually encourage customers to upgrade to the 3G iPhone as soon as it comes out:
“Usually networks prevent handset upgrades during contract term because the cost of the device is subsidised in line rental over the lifetime of that contract. This is not the case with the iPhone, as all of the handset cost has been paid upfront by the customer at point of sale. If a customer wants to upgrade from the current iPhone to a newer version less than 18 months later, where is the downside for O2? In fact, why not happily upgrade customers to a newer iPhone (taking another small percentage of the hardware sale in the process) and use that opportunity to reset and extend their existing 18 month contract?”
It sounds sensible enough, and would ensure that there’s not as big a rumpus in the UK when the 3G iPhone is released as there was in the US when Apple slashed the iPhone’s price just a couple of months after its launch. Alienating your early adopters, as the company has learned, is something to be avoided…
(via SMS Text News)
When they say “encourage” they better mean “discount”. I love my iPhone, but as a loyal apple customer I’ll be annoyed if I’m asked to pay full price for an upgrade so soon after shelling out for the phone.
I think that O2 should let iPhone Contract customers purchase the 2nd Generation iPhone (when or if it comes out) for it’s Apple RRP (lets say £299 this time) and then reset the customers contract from ‘date of purchase’ to another 18 month contract. In turn, O2 will be keeping their customer for a longer period. O2 will not be getting any percentage of the iPhone device profit, so the only thing O2 have to make profit on is getting people to sign up with them, and what better way to offer a new contract for iPhone 2nd Generation for 1st Generation iPhone O2 contract customers.
If O2 do not let existing customer change immediately to a 2nd Generation iPhone contract, they will loose customers coming back. Who’ll want to buy the 2nd generation iPhone 12 months after it has been launched by Apple (when your 18 month iPhone contract has just ended in May 2009!) on an even longer contract? By then we’ll have found away around getting an iPhone 2nd Generation on a contract and have no need to stay with O2. (just like the people who jailbreak their 1st generation iPhone already).
However, you have to remember that manufactures such as Nokia, Samsung, Motorola release new and updated mobile phones every month with no offer of a free or discounted upgrade to their newer model. If you already have their previous model, you have to remember you have entered into an 18-month airtime agreement with O2 so legally you are tied in, with no early upgrade until month 17.
I do think you have a valid point though, as all other mobile phone contracts with mobile operators do offset the price of the handset and include it as part of your mobile agreements meaning they have to actually buy the phone, but in this case with the Apple iphone you have already paid for the device in full. – I do strongly believe O2 been O2 will have some sort of offer for us pre-existing iphone users, but I also think it’s wise and healthy to put yourself in the mindset that you may have to buy the 3G iphone all over again.
On the flip side of this you also have to look at Apple, they do love to set fixed prices, and fixed terms and conditions a sort of ‘do as I say’ attitude especially with the iphone, in all honestly O2 better be prepared for its hands to be tied on who gets and upgrade and how much.
Is there a release date for these yet?
Upgrades? I think there’s some confusion here. The iPhone you effectively buy and then have a contract to use it. So the iphone is not like other phones in the UK in that there is no upgrade policy in place with the contract.
So when the 3G is available expect just to buy the phone, full price, and switch your service to that phone with no alteration to you new contract. When your contact runs out you renew it for another 18 months - the contract would just apply to what ever iPhone you where using it with. I would be very surprised to see any discount for existing iphone owners as that’s the equivalent of getting money off a new laptop or car just because you’ve owned the same brand before.