iPhone Fans Grate Over AT&T Pricing, Features

iPhone Fans Grate Over AT&T Pricing, Features

As expected, Apple once again captured the attention of the mobile world yesterday with the announcement that the iPhone 3G S would be going on sale June 17. But while Apple fans delighted over new iPhone OS 3.0 features and welcomed new features and performance from the 3G S, a chorus of grumbling—and even outright boos—greeted AT&T, Apple’s exclusive U.S. partner on the iPhone. Why? It all comes down to features and money: AT&T will not be rolling out support for new MMS and tethering support in iPhone OS 3.0 until late summer…and iPhone enthusiasts who want to upgrade from an iPhone 3G to an iPhone 3G S will be paying through the nose to do it.

Apple’s forthcoming iPhone OS 3.0 will offer integrated support for tethering (using the iPhone to provide a WiFi-based Internet connection for a computer) and MMS messages—and the features won’t be available just on the iPhone 3G S, but on existing iPhones as well. However, the bad news for U.S. iPhone owners is that AT&T doesn’t plan to have support for those features available on its network until late summer. Meanwhile, iPhone users on other carriers—say in the UK, France, Germany, and other countries—will get tethering and MMS as soon as iPhone OS 3.0 is released. AT&T also has not announced any pricing plan for tethering on its network, but promises the information will be forthcoming when the feature becomes available. Typically, carriers offer tethering as an additional option on a service plan for something in the range of $1 a day, or $30 a month.

Apple did announce pricing for the iPhone 3G S—$199 for a 16GB edition and $299 for a 32GB edition&mdahs;but those prices are for a new two-year contract. Existing iPhone owners looking to upgrade to an iPhone 3G S face higher price tags, since they would have to pay to terminate their existing service agreements with AT&T and initiate a new two-year plan. While AT&T notes that upgrade pricing varies from customer to customer (based on the date they initiated their contracts), fully-subsidized purchase of an iPhone 3G S won’t be available to existing iPhone 3G owners until they are 18 months into their contracts: that means users who bought an iPhone 3G as soon as they were available won’t be eligible for penalty-free upgrades to iPhone 3G S units until December of 2009. Early upgrade options for 16GB and 32GB iPhone 3G S units are available for $399 and $499, respectively, and AT&T also plans to offer “no commitment” pricing on iPhone 3G S units for $599 and $699 for 16 GB and 32 GB units…but that “no commitment” pricing still requires an iPhone plan, which runs a minimum of $70 per month.

Overall, iPhone users are increasingly frustrated with AT&T—leaving aside issues of network performance and customer service—and look forward to a day when iPhones will be available in the United States from multiple carriers. And while Apple isn’t quite saying the same thing in public, their painfully obvious omission of AT&T from tethering and MMS support during the iPhone OS 3.0 presentation at WWDC made one thing very clear: Apple itself could stand to see some improvement from AT&T too.