At only 7 months in to a 2 year contract, you've only fulfilled 29% of your commitment in return for the subsidy of $400 they gave you on your last iPhone.
So giving you another for $200, at $400 subsidy means $800 in subsidies for a 24+7 month period of service.
That $200 additional cost is, in fact, to buy you your last 2 year contract which you haven't paid back.
Now, as you may know, people who pay over $99 are given upgrades every 12 months. $69-$99, about every 18 months, and below $69 you're at 21 months.
It would make more sense if AT&T pro-rated the subsidy on an early upgrade. Say you're 7 months in on an 18 month upgrade cycle, well just give you the iPhone for $199 + ($200/18*(8-7)) = $199+$100. That would seem fair, to pay $100 more for being nearly 1/2 way through your upgrade eligibility period.
For whatever reason the early upgrade fee is flat, however. And I'm not convinced the phone is really $600 to start with. I personally thing $200 is gouging, especially considering the ETF on canceling is $175-Pro rated.
Anyway, I don't mean to sound like I'm defending AT&T. If anything the irritation is in the way the price is advertised, as $199. It's not. It should be advertised as $599, or $199 for new activations and qualified upgrades.
I wanted the new iPhone, I paid $200 more because I'm 11 months in to a 21 month upgrade period. And I didn't like it. But I knew buying the iPhone 3G was a 2 year commitment, not a 1 year commitment. If I want to upgrade early, I have to pay the price.
My wife's line is over $99, so she was a few weeks from her upgrade. AT&T moved it up a few weeks for her which was nice.
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