Is AT&T Price Gouging for Early iPhone Upgrades?

We don't know what AT&T did to lose its exclusivity grip on Apple's iPhone devices, but one thing's for sure, the wireless carrier isn't doing itself any favors by jacking up the price of early iPhone upgrades by $50. It may generate some additional revenue in the short term, but once the contract is up, does AT&T really want to give subscribers more reasons to jump ship?

Starting last Sunday, AT&T subscribers have to pay an additional $50 premium for an iPhone 3GS or iPhone 4G. With the $50 price hike added in, here's how the early upgrade pricing shakes out:
  • 8GB iPhone 3GS - $299
  • 16GB iPhone 4 - $449
  • 32GB iPhone 4 - $549
Those are all $250 higher than the subsidized price that new customers are eligible for. According to reports, the $50 price hike also applies to Android and Windows Phone 7 devices.

"As mobile device become more sophisticated, their cost goes up," an AT&T spokesman told ComputerWorld in an email. "This change reflects the increased costs, while still allowing us to offer customers the latest device before they qualify."

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