iPhone 3G[S], to Upgrade or Not Upgrade

There is no escape, if you live and breath in America, the iPhone 3GS buzz is definitely in the air. While some loved it and others found this update meager, most people are left wondering if its a worthy upgrade. Now that AT&T has soften its position for early iPhone 3G adapters, it makes the decision making process even worse. I will attempt to jot down my logic and help you make a choice.

Please find the three type of scenarios below and refer to them based on your situation:

1. Non-AT&T Customers: You have it easy since all of your options are fully subsidized and affordable. Your pricing options are: $99(older iPhone 3G), $199(16GB new 3GS) and $299 (32GB new 3GS) with a new 2-year contract. Unless money is tight, I would go for the 32GB iPhone 3GS. The sheer volume of internal memory plus the new iPhone features makes it a no brainer. iPhone 3GS is basically a computer in your pocket and going with the model with the highest storage capcity has never been a wrong move for me. 32GB is amazing!

2. Existing AT&T iPhone 3G customers since July to Sept of 2008 should receive the same pricing treatment like new customers with the recent change in upgrade pricing by AT&T. If you are reading this article, you must have been thinking about an upgrade. Think no further, if you are eligible, just do it! Why am I so convinced? Because the sooner you upgrade, the sooner you are off the hook with your existing iPhone 3G and contract since you'll be starting a new contract. With any luck, you might be able to unlock that old iPhone 3G and sell it to friends or on eBay and fund the new iPhone 3GS; TUAW has a great entry on Nextworth, a site that pays you for your iPhone. In any case, if you thought about upgrading, stop torturing yourself and get it over with, the idea is to upgrade as early into your 2 year contract as possible to save money from having to pay off your entire commitment. David Pogue wrote a great piece on iPhone pricing and how the subsidy works. Read it and you'll understand why I ask you to trade in ASAP.

3. Existing AT&T Customers w/ iPhone 3G who signed up in the past 6 months, you are in a bit of a bind. AT&T will charge you $399 for the 16GB GS and $499 for the 32GB GS based on the so called "early upgrade discount" with a 2-year contract renewal. You can otherwise buy the iPhone 3GS outright (locked) for $599/$699 respectively w/o the 2-year contract extension. My recommendation for you is to hold off from upgrading until your eliglibility changes to the status of group 2 above. The extra price you have to pay for such upgrade is not justified by this half-assed hardware upgrade. The only scenario I can think of that justifies the "early upgrade discount price" is if you have just purchased an iPhone 3G within the last 60 days. In this case, while you shelled out an extra $200 for the new GS, you've essentially paid off your 2 months new iPhone 3G outright at your disposal. Again, David Pogue's article on subsidized phone will help explain my logic on why you'd want to do this early into your existing contract.

Bottom line is this: if you have a plan to make an upgrade, do it quickly. It will end your current contract by extending it to a fresh two-year renewal; this is better than for you to wait until you are closer to the end of a 2-year contract then make the upgrade and two more years of renewal.