2 year contract. Why?

[cman6453]

I was just thinking the other night about the renewal of the 2 yr contract because of the purchase of the iPhone on day of release.

WHY were we required to agree to a new 2 year contract? Other than the "exclusivity" of having an iPhone, there was no other incentive. We all paid full price of the phone. It was an upgrade but, again, there was no incentive like an upgrade to one of the other phones with the huge upgrade discount. Anyone understand the point I'm trying to make? I haven't checked my account yet but I'm pretty sure I'm not eligible for another upgrade until 2009. What's up with that?!

[Zanthe]

I was wondering the same exact thing. What a rip off.

But the simple answer is: Because they can.

[Alexander]

Think about it. The iPhone had so much hype, and such a market, it was going to sell no matter what. People who desired the iPhone enough to pay $600 for one, generally would EXTEND their contract another 2 years without much thought because they're already extremists.

In addition, a lot of AT&T's profit on the iPhone comes from the service plan. The fact they REQUIRE the plan, and REQUIRE a 2 year contract brings in a flow of money at the sacrifice of a handful of customers (relatively speaking).

It's all for their benefit.

[Zanthe]

Originally Posted by Alexander

Think about it. The iPhone had so much hype, and such a market, it was going to sell no matter what. People who desired the iPhone enough to pay $600 for one, generally would EXTEND their contract another 2 years without much thought because they're already extremists.

In addition, a lot of AT&T's profit on the iPhone comes from the service plan. The fact they REQUIRE the plan, and REQUIRE a 2 year contract brings in a flow of money at the sacrifice of a handful of customers (relatively speaking).

It's all for their benefit.

Like I said, because they can.

Sure it makes sense for AT&T and since they have a monopoly on the hardware they have the hammer. I'd do the same thing. But as a consumer it's a rip.

[Alexander]

Originally Posted by Zanthe

Like I said, because they can.

Sure it makes sense for AT&T and since they have a monopoly on the hardware they have the hammer. I'd do the same thing. But as a consumer it's a rip.

I'm aware, and I agree. I was just elaborating AT&Ts reasoning, just in case "because they can" wasn't enough in-depth.

[jpm]

It's because apple gets a percentage of the monthly service fee. So they are guaranteed 2 years of income from each phone.

[Zanthe]

Originally Posted by Alexander

...just in case "because they can" wasn't enough in-depth.

Hehehe...I hear 'ya bro.

[cman6453]

Here's some good news, for me anyway. I just checked my account and it looks like I'm eligible for an upgrade in 5/2008, meaning my "upgrade" date was not affected by the required 2 year iPhone contract...SWEET.

I agree with all the explanations here. I just thought that an existing customer was getting screwed by jeopardizing their time into an original contract by extending it just for buying the iPhone at full price. Just confirmed that this is not the case...kudos to AT&T for that.

As for my monthly cost, mine was actually reduced by $20/month from my Blackberry plan which is one of the reasons that I got the phone.

[ahaxton]

I like my status symbols to stay status symbols lol.

Atleast it'll stop most cases of every 12 year old having it.

[skiz420]

BECAUSE APPLE SAID SO... because mr. jobs is getting a cut of the rate plans he wants to make sure every phone he sells gets him X ammount of $$$