The rumoured £20 per month remaining of contract to upgrade looks good on paper sure. Most iPhone customers are on tariffs ranging from £25 to £75 per month so this is great no? NO it’s not great!!!

Most iPhone customers probably believe the iPhone tariffs are the full range of tariffs available to them. They aren’t. I changed 2 months ago from an iPhone tariff over to the standard set of tariffs as I was starting to use my iPhone sim in a Sony Ericsson Xperia X10. And being on the standard tariffs makes me aware of two more additional tariffs below the £25 level priced at £15 and £10.

So I will be on the £25 a month tariff with 12 months left to run when the iPhone 4 comes out. So assuming this taken with a pinch of salt report is correct upgrading to the iPhone 4 using the early upgrade offer will cost me £240.

Alternatively I can either try and get an additional contract or if that fails I’ll have to wait 2 months, downgrade to £15 and then to £10 a month and then pay off my contract. That will cost me £25 for the first month, £15 for the second and then £10 months at £10 which is a total of £140 saving £100.

If the report does turn out to be accurate and that really is the O2 upgrade “offer” I’d strongly suggest people take a good hard look at it and work out if it will be significantly less expensive to do it another way

EDIT – The details are now up on the O2 website regarding the early upgrade offer and as feared its the fantastic £20 a month offer that works out more expensive than dropping down to the lowest tariff and then buying out the remaining months of the contract. Nice one O2

Since the announcement, what have the UK mobile networks done and what information have they released to their (potential) customers? Well the answer to that is not much. Each network have come out and said they will be selling it (in the order O2, Vodafone, Orange and new to the iPhone T-Mobile). O2 have also come out and said existing customers would be able to upgrade onto it but provided no solid details on if that is all existing customers, selected existing customers, a few customers drawn out of a hat or what.

Go onto most of the mobile phone network websites and you’ll find naff all actual information apart from harvesting e-mail addresses with the promise of being the first to find out. But the information we need such as cost and details of O2′s early upgrade scheme are nowhere to be seen. And it’s starting to thoroughly pee me and some other people off. It’s not like this has come as a surprise to the networks, they must have known about the impending announcement probably long before anyone else did. So all the information their customers need should have been ready to go the second Steve Jobs stopped talking.

If you look on the twitter feeds for some of the UK networks HERE and HERE its just full of people asking the same question that should have been answered on Monday night “how much will it cost” or in O2′s case “will I be able to upgrade and how much will it cost” and its getting ridiculous. The only reason I can think of why not one of the networks has come forward and revealed their pricing is they don’t want to be first and risk the other 3 undercutting them. Now that is fair enough but they need to realise that keeping their current and potential customers in the dark is going to thoroughly pee them off possibly to the point where they will just go to the first network to announce the prices even if the others are slightly cheaper.

Last year O2 made a right mess of the 3GS launch by refusing to listen to their customers and not allowing any kind of upgrade path without paying unlawful penalty charges, buying the device at full cost on PAYG or taking out additional contracts. This was responsible for the #o2fail tag to appear on twitter and it has had one or two mentions again this year as has my hashtag #tellushowmuchnow (which hasn’t taken off as yet).  This year 4 networks are bustling for our custom but are making an even bigger pigs ear of things by keeping (potential) customers in the dark and not giving people the information they need. Who knows, perhaps by the time iPhone 5 is announced we might know how much iPhone 4 is going to cost!

Appearence

The 3GS appears more or less identical to the 3G. Well in my case that isn’t entirely true as my 3GS has double the capacity of my 3G so has a different number on the back and is a different colour as I opted for the white version this time.

I did expect the white version to be white all over and not just on the back cover. The area surrounding the screen is still black so unless you look at it from behind there is no noticeable difference.

People seem to be raving about the new charger and rightly so as the charger changes from a bulky affair to one that is smaller than a standard electrical plug.

Interface

As is commonly known the new phone is little different in terms of usability from the old 3G with the new 3.0OS. However there is a noticeable speed difference when using the phone and navigating menus and the like.

New features

The much talked about compass seems to do exactly what it says on the tin and integrates with maps nicely. I am slightly concerned however that maps seems to try and determine my location from my home wifi network when at home and wifi is turned on (presumably as GPS always did suffer indoors). This has the nice side effect of banging me two miles to the west and near to PNE football ground rather then where I actually live.

The voice control feature sounds nice but can’t say I’ve tried it yet.

*goes to try it*

Well it seems to do alright. Probably about a 90% hit ratio with what I asked it to do. Would be nice to have the option to play a specific song rather than a playlist, album or artist though. Perhaps in OS 3.1

The camera autofocus seems to work well. I can’t say I’ve noticed much difference in picture quality though. I have not as yet tried the video camera.

I am yet to use MMS on the 3GS as I never was a big picture message user unless they were free and I used them instead of texts (last time that happened was with imode handsets). However as the 3GS’s MMS support is the same as the 3G’s but with video added I’m guessing it will be fine

I have not even attempted to use tethering. People seem to be very put off at O2′s pricing even though and O2 wont even permit its use without buying a bolt on though there is a hack to get round this. O2′s pricing on tethering seems to be on a par with their mobile broadband pricing though and as I already have mobile broadband I cant see me using this much.

So is it worth it?

The extra speed alone probably does make this a worthy upgrade. Voice control is useful though I would like to see the accuracy pick up slightly and additional control options.

However, my original opinion stands, it is not worth people paying silly money to buy the handset on PAYG or even worse buy out their contracts. Thankfully I managed to work round both those problems and went for neither option. The 3G does much that the 3GS does equally well or not much worse. Unless you must have the latest phone or really need the speed boost, voice control, video and a compass you should probably hang fire. The 3GS is an excellent device though, however many people feel that this is what the 3G should have been first time around.

Apple have apparently reported that sales of the 3GS over the first weekend were in the region of 1 million units worldwide. Not sure how that compared with the 3G though an accurate comparison is impossible as many 3G owners were unable to upgrade this time, and stock levels for the 3GS seemed to be higher than they were for the 3G. Not to mention all the technical issues that plagued launch day on the 3G were avoided this time round

The reason being that the phone has been available for pre-orders on at Carphone Warehouse for 3 days now. When the iPhone 3G went on sale for pre order on both CPW and O2′s websites it sold out in a matter of hours. However 3 days on CPW are showing no signs of running out of stock.

Now of course that could simply down to Apple making much more stock available to cover the demand. However I think it’s more likely that the device simply isn’t selling. O2 have over priced it to new customers and alienated their existing customer base by failing to provide a reasonably priced upgrade path. The only people likely to be pre ordering a device which is basically the same as the 3G but a tad faster and with an extremely useful built in compass are the most die hard of Apple fanatics who must have the latest hardware as soon as its released.

Most normal people will simply have realised that it isn’t worth the price tag O2 have placed on it and it certainly isn’t worth locking yourself into a 2 year contract which in all likliness will result in you missing the next iPhone release from Apple which in all likliness will be a much bigger step up in spec than the 3GS is

So with no sign of victory on either side I’ve been thinking about the whole having to buy your contract out to upgrade early thing and wondering, did it always used to be this way. And the answer is no.

Many moons ago some of the networks, most notably orange, used to charge a fee to upgrade rather than simply charging for the remainder of the contract. The fee would vary depending on monthly spend and how long of the contract was left but was generally less than the remainder of the contract and meant that if you had the money you could upgrade as often as you liked.

Now surely a system like this would be better for not just iPhone users but any contract customers as it would mean they could upgrade as often as they choose with the networks not losing out as they recovered the subsidy and other losses from the upgrade fee. Win win situation as far as I can see.

One has to wonder why the networks abandoned this system of upgrading!

LINKY

Update 12/06/09 11:29 – CPW are still taking pre-orders and just e-mailed me to inform me they were (I already knew of course). Oddly pre-ordering has been open for a day now. The iPhone 3G sold out on pre-orders on CPW and O2 online in hours. Can’t imagine why this new model isn’t having the same impact

The banks of course have been charging people for breaching the terms and conditions of their accounts by going over limits, allowing transactions to bounce etc etc and a few years ago the consumer struck back and challenged the banks on if the charges were fair. This is still being argued in the courts but the general result is no they are not because the banks cannot justify them as being proportionate to their loss.

So lets examine the O2 case, if someone breaches their contract O2 then lose the remaining line rental. So to balance that out they charge someone the remaining line rental as a cancellation charge. Sounds fair doesn’t it? Lets examine the line rental though

From what I can gather there are three major elements to the line rental on a contract phone these are

• Subsidy – The discount O2 gave you off the price of the handset in order to entice you to buy it
• Profit – All companies make profit (well these days we might question that with companies going bust left right and centre). Profit is good
• Costs – Providing the service to you costs money in the way of maintaining the network, providing minutes/texts, customer service, billing etc etc

Now we can reasonably expect O2 to recover the costs from the subsidy and the profit as these are losses O2 will make from the breach but what about those costs? O2 are not providing a service to you at least for the remainder of that contract (they will be if you take a new iPhone 3GS contract but the costs will be factored into that contract and not the one thats been cancelled) so their costs will be zero. So attempting to recover those costs is not proportionate to their loss, hence a penalty and hence unlawful.

So the big question is how much of the line rental is broken down into which element. Well thats a tricky one and one O2 didn’t want to answer when I put it to them on twitter. The only bit that can be reasonably calculated is the subsidy as well which for a customer on iPhone 35 is £7.34 a month and for a customer on iPhone 45 is £7.33. This is calculated by deducting the cost of the equivalent simplicity plan which is unsubsidised away from the cost of the iPhone plan.

Whilst I am no legal expert, I do frequent forums which deal with legal issues and the bank charges issue and I am pretty confident O2 expecting people to pay the costs element of the line rental for a service they will no longer be providing in a cancellation charge is unfair, a penalty and consequently unlawful for the same reasons as the bank charges. However I take no responsibility if anyone wishes to pursue that in court and loses. However if I am right it doesn’t just affect anyone who has cancelled to upgrade to the iPhone 3GS with O2 but anyone who has ever cancelled their contract and not just with O2 but with any other network and that could open flood gates just like it did with the banks

What bothers me more is that O2 seem to be doing everything they can to quell sales. Ok fair enough there is a very valid argument for not allowing existing customers but O2s pricing for new customers is frankly stupid compared to the 3Gs original pricing and isn't going to attract huge sales (who wants a phone on a £75 tariff or on a 24 month contract... a few people will but not many)

This morning I get a PM from O2′s moderators saying they have removed that passage. The reasons quoted are

This is because the comment you have made contained general criticism of O2’s products or services. You are more than welcome to share your experiences with O2, whether they’re positive or negative. Doing so may allow other users to provide support as well as providing us with insight to areas that are going wrong.

What we cannot accept are widespread, malicious or gratuitous criticisms of O2 as a company or a brand.

Now I can’t see anything malicious or gratuitous in that section rather than a widely accepted fact that O2s sales are going to suffer not just because of the upgrade policy for existing iPhone owners but also because the pricing for new customers is ludicrous compared with the pricing last year. Not only that but who will want to lock themselves into a 18 month or 24 month contract knowing full well that they wont be able to upgrade onto the next model which will be out in 2010. No one that’s who.

Still if O2 can’t handle the truth then perhaps they need to review their pricing and upgrade policy before their sales take too much of a hit and Apple consider offering the phone to other networks. I’m sure Apple are watching all the negative press on twitter and in the UKs media with interest!

The new model boasts the following improved features

• A compass so maps knows which way you are facing
• An improved 3MP camera with auto focus and video capabilities
• A faster processor so some tasks and launching apps should be faster
• More storage
• HSDPA
• Voice dialling and commands

All in all it’s not a great improvement over what the iPhone 3G can do once OS 3.0 comes out on June 17th and one of the features is available on a jailbroken iPhone 3G so clearly Apple are blocking current iPhone 3Gs from using it. Much more offputing is O2′s new crazy pricing which means the device will only be free if you agree to a 24 month contract or a £75 a month contract or the device will be approx £450 on PAYG for the 16Gb version and £550 on PAYG for the 32Gb version. Not exactly the cheaper prices making the device available to more mentioned at the keynote.

Even worse is the fact that last time a new model came out customers could upgrade for free. This time customers either have to wait for their upgrade date (for most early adopters this is January 2010) or pay to end their contracts early (again for early adopters that will be approx 7 months at your monthly rate so in my case approx £245), and then agree to a new 18 or more likely 24 month contract.

Madness in my view as given Apple’s habbit of releasing a new model every year who on earth is going to want to agree to a new contract which will likely make the customer miss the model that will be inevitably released in 2010. Not me thats for sure and frankly unless O2 change their upgrade policy and prices fast, I may be looking elsewhere come my contract expiry

EDIT Full details of the ludicrous pricing HERE

So how are we finding the changes. I’ll avoid talking about BT as a phone line is a phone line in respects of making calls so I’ll just talk about the TV and broadband.

TV

The main difference is probably the reduction in tuners in the sky plus box compared to the v+. There is the lack of HD as well but since we don’t have a HDTV and virgin media only have one HD channel that really isn’t a great loss.

The sky plus seems to function fine with the additional benefit being I can now set programmes to record whilst I am out from my iPhone. We also now have full teletext services which is nice (Yvonne wants to look at holidays).

Probably the only bad thing is the installers left some wires trailing that we need to tuck under the carpet at some point. Oh that and the sky plus doesn’t confirm when you press to delete a recording, it just deletes it. There was also an annoying rotating light on the front of the sky plus box when watching a sky plus recording but I managed to turn that off!

Broadband

Now this is probably where I would notice the difference as we have moved from a 20Mbit service to an up to 8Mbit service. Our broadband synced at 5.5Mbit last night but since then has increased to 6.1Mbit.

Oddly we have not notice too much of a speed difference. Probably the main reason for this is virgin media traffic manage their 20Mbit service and reduce it to 5Mbit if you dare actually try and use the 20Mbit service. So in actual fact taking this traffic management into account our service is now faster!

I was also concerned from the number of O2 broadband users experiencing slowdowns at peak rate. I am pleased to say however that so far we haven’t experienced this.

Conclusion

We’ve actually made a huge change by switching from having phone, broadband and TV with one supplier through cable to having them provided by 3 different suppliers through satellite and a BT phone line. So far so good though and this is saving us £15 a month on our previous prices. We also now get three small manageable bills rather than one chunky one.

Of course this saving could be negated as Sky gave us free sports and movies for one month to try and Yvonne is quite liking having the movies so we could end up keeping them. Oh well easy come easy go