With the release of the iPhone 3G S yesterday, the only thing that seemed to get more press than the actual phone itself was the deafening chorus of FAIL directed towards AT&T.

AT&T has failed big time with this launch, in a few obvious ways, but there’s one spot where I’m going to redirect that FAIL right back at the source of the accusations. So, where did AT&T drop the ball?

MMS Support FAIL

MMS is the ability to send a picture, video, or audio along with your text messages – a Multimedia Messaging Service. When iPhone OS 3.0 launches next week, along with the new iPhone, iPhone owners will finally have the ability to send MMS messages. Unless, of course, you’re using your iPhone on AT&T. Which a majority of iPhone users are doing. Other iPhone users around the world will have this feature enabled out of the box, but here in the US, AT&T has shown us that an advanced feature such as that is just too much for them to handle right now.

Of course, MMS on the iPhone is a two part FAIL, the first part directed towards AT&T, the other at Apple. Can Apple explain why iPhone users have had to wait two years for a feature that the free Nokia clunker that AT&T gave me two years ago has had that feature, and it works just fine? Of course, if the iPhone had that feature on day one, then they couldn’t treat it like some fantastic new feature that they came up with.

Tethering FAIL

The second FAIL on AT&T’s part is the tethering option, or being able to share your iPhone’s internet connection with your computer. Again, being what amounts to the flagship carrier of the iPhone, this feature needs to be working now. Not sometime later this summer. I honestly don’t think anyone will be surprised if Apple doesn’t renew AT&T’s exclusivity, based on their apparent lack of preparation for this feature, or the MMS.

Pricing FAIL

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The biggest cries of FAIl that I’m hearing about AT&T’s handling of the iPhone 3G S is the pricing structure. Current owners are up in arms over the fact that to upgrade to the 3G S, it could cost them almost $700, and that’s completely unreasonable for iPhone owners. (Here’s where I’m probably going to piss off the most folks now…) The pricing is not a FAIL by AT&T. More like the mobile industry in general, or the folks who don’t read the fine print when agreeing to contract terms.

I do not own an iPhone. I have a Nokia 6555 that I got for free when I switched to AT&T a couple of years ago. Last night I checked out upgrade pricing for my account, and I fall into the same category as iPhone 3G owners – the dreaded list of “non-qualifying” customers. I would have to pay the same $700 to upgrade to the new iPhone as well. Why am I not complaining though? Because I realize that unfortunately, I’m still under the contract I signed to get that free phone in the first place, technically I’m still paying for that “free” phone. I could complain, but it’s something I agreed to when I signed the contract. Until my contract is up, I’m not eligible for special pricing on any phones.

Suppose I wanted to upgrade my current phone to something else – even one of the “free” phones AT&T currently offers. For new customers, or “qualifying existing customers” (defined by the AT&T rep I spoke to on the phone last night as customers not currently under another contract), here’s the upgrade pricing for three of the “free” phones listed on AT&T’s site:

  • Sony Ericsson W350 – $150
  • Samsung a637 – $169.99
  • Pantech C630 – $229.99

Yup. Free to new customers, but up to $230 for “valued customers” like me, plus an $18 upgrade fee. (As a side note, AT&T really needs to change that “valued customer” wording.)

“But… but… I didn’t need to pay a crazy upgrade cost to switch from my original iPhone to the iPhone 3G!” Of course not – you paid full price for your original iPhone. The 3G was then cheaper for you because AT&T subsidized the price of that handset. Unfortunately for you though, when you bought your 3G at the subsidized price, that price was based on you keeping that handset for the full two years of your contract. That’s the exact reason why they’re now asking you to pay more for the 3G S upgrade – AT&T is essentially rolling the cost of the remainder of your existing 3G contract into the new phone’s price. They’re doing the exact same thing to me – because I’m still under contract, in their eyes I have to finish paying for my “free” phone. (Even though with less than a month left on my contract, I don’t understand why my upgrade pricing is the same as someone with a year left on theirs. Why isn’t that upgrade rate pro-rated?)

After speaking with AT&T last night, they informed me that once my contract expires next month, I’ll be eligible to get the 3G S at the prices mentioned in the keynote yesterday. Once my contract expires, I’ll become a “qualifying customer”. I would assume that any original iPhone owners who didn’t upgrade to the 3G will as well. (Of course, you’d need to confirm this with AT&T yourself for your own account.)

I realize that many folks like to have the greatest and latest piece of hardware – I can appreciate that. However, I don’t understand why many iPhone owners are so up in arms about this. These are terms that you agreed to. I’ve heard many talk about petitions, and that iPhone owners should be able to upgrade without the penalty. Why? Why should iPhone owners get preferential treatment? Why not the Nokia fanboy out there that wants to upgrade his Nokia every year? When you sign those contracts to get the cheaper phones, you’re all under the same rules, regardless of who makes your handset.

Well, what about agreeing to a new contract with the 3G S? As I see it, you’d still be in the same boat – you still owe AT&T for the subsidy on your 3G, so either you roll that cost into the hardware price, or make the contract a three or four year, instead of the two. Either way, you’re still going to pay a higher price.

Will I be getting the 3G S? I plan on it. Of course, I’ll be waiting until next month to do so, because it would be just plain stupid to pay extra to upgrade now, when I can wait a month to do so, and save a few hundred bucks. I also realize that I’ll be agreeing to a 2 year contract to get the phone at that price, so next year when a new iPhone comes out, I won’t be able to get the new pricing, and would have to pay a crazy price to upgrade.

I’m not trying to defend AT&T here – I personally think the mobile industry is screwed up, and hate the notion of any contracts to get a phone. I just think it’s important that folks try to actually consider the other side of the story here. AT&T has done a lot of things incredibly wrong, or just plain stupid, but this pricing isn’t one of them. Sometimes life just sucks, and you can’t get what you want – sorry.

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