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Jun. 19, 2009

Wireless carrier AT&T has said it will allow some current iPhone users to upgrade to the newer model and at the same price as new buyers when it is released sometime today.

Today's announcement comes after AT&T took some criticism from iPhone owners who felt that its prices were unfairly treated.

For example, current iPhone owners would have to pay $399 for the lowest-cost version of the new iPhone 3G S, compared with $199 for new buyers.

The Dallas-based wireless carrier heavily subsidizes the purchase price of the phone, and it takes a while for it to make that money back through monthly service fees. That means it doesn't want to sell new, subsidized phones to customers who haven't "paid off" their old phones.

AT&T customers qualify for the "new buyer" price after a certain period, determined by a formula. Factors include how much they pay per month and whether they're current on their payments. Those who pay at least $100 a month generally qualify 12 to 18 months after the purchase, AT&T said.

However, the most recent 3G iPhone model went on sale in July 2008, meaning iPhone users who bought it then have been ineligible for the lowest price on the new phone.

Made by Apple, the new iPhone 3G S includes a faster processor, longer battery life and an auto-focusing camera.

On June 17, AT&T said current customers who would otherwise qualify for the lowest price by September will qualify today, when the new 3G S iPhone officially goes on sale.

(Ed. note) Overall, Apple's new iPhone could really shake up Palm's new Pre that just launched less than 2 weeks ago.

Nevertheless, it will be interesting to see how this fans out. There's no question that AT&T is as keen as ever to make the iPhone the best selling smartphone on the market.

But by the same token, there's also no question that it will also do its very best in trying to extend its exclusive distribution contract with Apple past the July 2010 deadline.

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    This article was featured on Business 5.0 and on Tech Blog.

Source: AT&T.