[KenKlinger]

Good grief--talk about adding insult to injury! I must be in the dark re; iPhone pricing. From Job's speech in June, talking about getting more for less $$$, I hadn't heard anything about all the different prices out there, or rebates thru AT&T, much less folks at Apple Stores quoting a range of prices. I paid $499 for a 16Gig iPhone in January, and thought it'd dropped $100 for the 3g model. I've had Apple's stuff and nothing but since '85, but as good as their products have been, IMO, their customer service has always gotten a super-low rating from me. Once, very early in the AM I called their 24hr support line, and got a kid who actually told me to "get F'd" when I pointed-out I had tried all the things he was suggesting as 'help', and he hung up cold in my ear. And, once AT&T's got you as a customer, you're put to pasture as well is what it's looking like from all I've heard and experienced first-hand. What ever happened to the 'customer is always right'? Honor and thieves... bad mix, indeed. It's all about money, and when the deal's done, fair-the-well. NEXT?!!!

[skemple]

My local AT&T store was the same. A line started forming the night before, so I got in line 10:30 that night. I was about 60th in line. The AT&T employees got there about a half an hour before 8:00, so we asked them how many they had and they would not tell us. Finally right at 8 they told us they only had 40 and 10 were the 16 gig model. I was so ticked. I figured with where I was at in line I was pretty much guaranteed one. Since I had already waited that long I was not going to sign up for and get one next week. I wanted one today, so I went to the Apple store about 30 minutes away. They had plenty of them, but with all the activation problems I didn't leave with my iPhone until 5:00 p.m., so I was in line just at the Apple store for another 8 hours. I do have to admit I am loving the phone now that the adventure to get the thing is over.

[chadhorton]

I could do that but I would have to continue to pay for my current plan with AT&T

[douglas_goodall]

That was actually several questions in one. As for whether I would want to buy on the first day... There were several aspects to that. First the waiting in line and how many units were in stock aspect. Then there is the how well does the process work on the first day question. Then there is the, "should you buy from the first shipment of any new version?" question, where the salespeople have only just barely gotten trained.

It is time for a long hard cold look at the entire contract/subsidy/eligibility game. I think many people having stood in line all night will ignore the eligibility issue and pay any price to take home the product. I hate to think they were depending on that. Given that the phones are being released on a one year schedule, how does that work with a two year contract scheme? Even if we were eligible this time, what about next year? If we knew up front we were going to have to pay full price, and that we would want to upgrade each year, would we consider the value worthwhile? Is it possible they are only interested in the new customers, and not really concerned about the faithful?

And the final terrible question... Do I have to admit that I was a fanboi and was ready to put up with all this, and only came to my senses due to the extreme greed of AT+T?

[douglas_goodall]

You sound really ticked off. I have calmed down some, but I have realized what bothers me the most. All this talk about a $199 price for the iPhone. The $199 price is only for people who aren't under contract. But almost all of us are under contract. The don't say $199/$399 to keep us realistic about the eligibility score. When I arrived at the Apple store, they asked me, "Did you contact AT+T and ask about your eligibility?". I said, "Huh?". That is when the sinking feeling started in my stomach. I understand that people agree to contracts so they can reduce the front end price of cell phones, but this really just covers up the real question. That is, why do these phones cost 500 dollars when they are selling millions of them and economy of scale should have driven down the pricing enough so that average people could afford phones. I have no idea how much these little wonders actually cost to manufacture, but since everybody I know has at least one, they should know how to build them cheaply by now. Apple wants to make money on the hardware, and probably want a piece of the air time as well, but Apple also expects a large percentage of the owners to buy .Mac and applecare as well. All in all there is a lot of money in it for them. They don't have to get it all at the front end on the hardware. Also people with iPods and iPhones are likely to buy Macs too. It's a win-win for them if they just stay cool. Also does 8GB of ram really cost $100? It would have been far cheaper all around to just build all 16GB models, have one product code, and have twice as much leverage with the memory chip vendor for buying twice as many identical ram chips at once. If I buy a 199/299 phone today and accept a two year contract, the likelihood is high that I will really want to buy a new phone in a year and end up forced to buy at full price due to ineligibility. This 2 year contract thing is a train wreck from the start, with the speed at which new hardware is being developed.

[chimpunk]

DG: "...does 8GB of ram really cost $100?"

Well, as a guide, Costco currently sells 4GB CF cards for $40/each. IMHO there should be some sort of trade-in allowance, or in my case, hand-me-down to a family member. It's fairly shocking to me how badly Apple has handled this, including allowing it to completely obliterate all other store sales. One way to have handled it would've been to set up a temporary store-within-a-store just to handle iPhone sales and authorization. Keep it in a segregated area and continue to do business as usual in the rest. At Santa Monica 3rd Street Promenade, general sales customers were being let in at about 1/10th the rate of iPhone customers, which infuriated them. Apple might consider that their profit margins on general sales are probably much higher than on an iPhone.

[douglas_goodall]

Sure but the cards at costco aren't being included oem and are individually packaged, as opposed to being soldered on as surface mount part on a circuit board. I am just asking if the manufacturing difference for Apple between making an 8GB unit and a 16GB unit justifies the cost difference, and whether the cost to Apple of having two kinds of separately packaged units is worth it. If they just make them all 16GB, it might have saved them enough money to pay for everyone to have a 16GB unit.

[rickcarl]

chimpunk said:

DG: "...does 8GB of ram really cost $100?"

At Santa Monica 3rd Street Promenade, general sales customers were being let in at about 1/10th the rate of iPhone customers, which infuriated them. Apple might consider that their profit margins on general sales are probably much higher than on an iPhone.

At the Scottsdale AZ Biltmore store the line in 99 degree heat was half way around the building when I stopped in at noon on Friday but they let me in at the head of the line because I wasn't buying a phone.The staffer taking care of me said it was slow going but they had been making progress. My Applcare purchase was potentially one hundred percent profit. ;-) Yes, I left without a phone and don't need one.

[teacher24_70]

The Leawood, Kansas store was not only launching the iPhone 3G today, but it was also the Grand Opening of their store.
I was in line by 6am--not sure how many in front of me--probably around 100.
I patiently waited in line until an employee said that if there were people that were NOT buying an iPhone, we could enter the store and begin browsing and shopping.
As I was there for non-iPhone purchases (and the experience of an Apple Store opening), I was excited and happy to enter earlier.
Even amongst the craziness of the iPhone buyers, the Apple employees were very helpful. Many of them were wandering the floor answering any questions that customers had--iPhone related or other.

[Tom_Diola]

Apple shouldn't have gotten into the business of Activating the phones.
1. What happens when there's the slightest problem - They call AT&T on the iPhone and wait 10-20 minutes
i.e. they don't have any resources to solve any of the (oh you have a corporate discount so we can't process
your order) or There seems to be an error so we'll get a Concierge (aka Apple Idiot) to call AT&T to see what's
wrong then they hand you the phone without an earpiece and you're trying to talk to the AT&T guy through
the masses of noise all around you without an earpiece ...
Apple you blew it big time this time!

[imagineengine]

It would of helped a lot if Rogers could of worked out a deal with Apple to sell the iPhone 3G not just through authorized Rogers dealers but also through Apple's retail stores. The high demand for the device here in Canada left many consumers such as myself waiting till the stores get more in stock. Sure they have a lot of 8 GB iPhone 3G but most stores only carried between 10 to 20 of the 16 GB black model. I'm wondering if Americans experienced the same issue when trying to purchase the iPhone 3G 16 GB black model?

[Phrehdd]

KPOM writes: The problem is that Apple has locked the phone down so much in an attempt to prevent unlocking. For most phones, upgrading simply means taking your SIM card out of your old phone and putting it into your new phone. AT&T can then change your account terms on its own systems. What Apple has done is require each phone to accept only certain SIM cards (not just any AT&T SIM, which is unusual), and also to "activate" the phone before it can even perform its non-phone functions. It adds a layer of complexity.

Interesting notion you present. You might want to consider this - ATT subsidizes the new phones to make them appear as if they are inexpensive so that newbies join the "iPhone club." If ATT wants to ensure that people don't readily hack their phones et al, they would indeed be the ones to force the issue of activation not Apple. The point being if they didn't force the activation, then people could and would be able to get the upfront "discount" elect not to use ATT at all (whether no carrier or possibly another provider).

Again - I think ATT is one of the all time greediest companies around. 3G merely makes them competitive and yet, they use it as an excuse to raise the price. I would love to see both Apple and ATT named in a class action suit for false advertising. The new phone is NOT cheaper when ownership includes a 2 year contract that makes the total cost MORE than the first gen phones plus contract. (Sorry Apple, I often sing your praises but this is not one topic that anyone can really find 'good' in your selling process.)

[douglas_goodall]

Well Tom, you couldn't have been more accurate if you had been standing there watching what happened to me. When they hit my AARP discount, out came the phone to ATT and they handed the phone to me, and away went my discount. Then it just got worse after that. And you were very right about trying to speak with them in a noisy environment that was more like a circus. Everyone I spoke to at ATT had an attitude and none seemed to welcome the new Apple customers.

Before I drove an hour to the Apple store, I tried my local AT+T store. They had run out and when I asked when they would have more, they told me, "Maybe next year". As I walked away I decided I wouldn't ever do business with that store in the future.

I really resent having to give up my AARP discount at the beginning of the iPhone purchasing process. Why was that exactly that I had to do that? Was that Apple's idea, or ATT's idea? I thought that discount was negotiated by AARP for any cellphone contract cingular/ATT. I will be going back to AARP about this on Monday.

As for the non-corporate AT+T stores that weren't allowed to sell iPhones. I think they dodged the bullet as their customers would have been pissed off about the limited number of phones and the activation and pricing issues, starting with the eligibility stuff.