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@Play: New Products Can Be Obsolete in a Heartbeat

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By Mike Musgrove
Sunday, June 14, 2009

Last Sunday, I was lurking at the local Apple store, poking at laptops and feeling a mild bit of concern for my fellow shoppers.

My PowerBook is five years old at this point: Finally time for an upgrade, I figure. But I wasn't about to reach in my pocket for the credit card, because I knew there was a good chance that some of the shiny masterpieces I was looking at would be obsolete literally the next day.

Sure enough, two predictable things happened the next afternoon. One, Apple refreshed its iPhone and laptop lineup in a flurry of announcements made from a stage in San Francisco as it kicked off its annual Worldwide Developers Conference trade show. And two, there was a widespread burst of buyer's remorse as some people suddenly realized that they maybe should've have held off another week or two to buy that iPhone.

"Just grand," complained one online reader, posting under my news article that noted the $200 iPhone 3G would now be offered at $100 -- and that $200 will soon get you a slightly better version of the popular smartphone. "I purchased my iPhone G3 just three weeks ago, and no one mentioned the pending price reduction of [the] newer model. Thanks for nothing, AT&T."

With this year's new iPhone launch, there was a slight twist, making the prospect of an upgrade more annoying for one class of iPhone-toting gadget fans. Typically, people get a discount worth hundreds of dollars on the price of their cellphones in return for a long-term contract with a carrier. Last year's $200 iPhone was an updated and subsidized version of a device that originally cost a whopping $600 two years ago, after all.

If you bought a new iPhone last year and want the latest updated version this year, you might end up feeling a little gouged. Just about everybody will have the option to pay $299 for the device, but iPhone owners who bought the then-new 3G phone last year will have to pay $499 for the now-new premium version of the device. It's not as profitable a proposition for AT&T to offer the same customer a deeply discounted phone two years in a row, so the company wants more money from last year's buyers.

Some 3G-owning AT&T customers were up in arms last week, protesting that they should have the right to get the new phone at the same lower price as everybody else. "This is ridiculous and [a] slap in the face to long time loyal iPhone customers like me," read one typical complaint posted to AT&T's Web site.

AT&T spokeswoman Alexa Kaufman said last week that last year's iPhone buyers are still getting something of a discount from the device's "actual" price. If you want to buy that same iPhone without any binding contract with AT&T, after all, you'll have to fork over $699. Most people don't take that option because, after all, what good is a cellphone without a wireless carrier?

To make recent iPhone buyers feel a little better, AT&T last week offered to let folks who bought an iPhone after May 9 get a credit on their bill for the $100 price difference, if they stop by an AT&T store by today. And new iPhone owners who want to swap their "3G" model for the new "3G S" can place an order if they visit an AT&T store by Thursday, the day before the new devices go on sale.

If I were a 3G owner, I wouldn't hold out hopes for a better offer than that. As Apple chief executive Steve Jobs wrote in an open letter to his company's customers two years ago, after some got upset when the company slashed the device's original $600 price to $400, "this is life in the technology lane."

"If you always wait for the next price cut or to buy the new improved model, you'll never buy any technology product because there is always something better and less expensive on the horizon," he wrote. To assuage the feelings of aggravated customers, Jobs offered up $100 in credit per customer.

I was one of those customers. And hey, as a guy who shelled out $600 for the original iPhone, I believe I'm eligible for the lower prices on those new "3G S" iPhones. I'm not sure I need the phone, but as long as I'm already paying the monthly AT&T fee, I suppose I'm not a sucker if I decide to get the latest and greatest. Right?

As Kaufman at AT&T put it, "You're not a sucker, Mike, you're an early adopter."

Yup.


© 2009 The Washington Post Company

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