People are already starting to complain about the cost of upgrading from the 3G to the 3GS, but I’m not surprised and neither should you be.
Last summer, many existing AT&T customers were forced to pay a similar premium for the iPhone 3G. Who, exactly? Any non-iPhone owner still under contract. AT&T had subsidized their phone in exchange for the promise of two years of revenue. And like any carrier that subsidizes, if you’re going to bail out of your contract, AT&T is going to want its money back, be it in the form of an early termination fee or an upgrade premium.
Still, when the 3G was released, the upgrade premium was $200, not the $400 newer 3G owners are seeing today. This drastic difference is most likely due to cost differences between phones. The iPhone is a rather expensive piece of hardware, after all. Original iPhone owners may recall the unsubsidized $499/$599 price tag. No doubt the 3G cost a little more with all that extra fancy hardware. Maybe $599/$699? Getting that down to $199/$299 required a rather healthy investment from AT&T.
But the usual subsidy for a provider is around $200. Why would AT&T subsidize so much more than usual? Simple: the iPhone is a phenomenon. People bought the original in droves despite its high price. AT&T knew there would be very little risk in heavily subsidizing because it was all but guaranteed a boatload (millions, in fact) of new customers, customers who would be loathe to give up their precious iPhones just to switch carriers. If I were AT&T, I’d have doubled down too.
But like any company, AT&T is in the business of making money, not losing it. If it does you a favor, like subsidize your phone, expect it to call in that favor.