iPhone 3GS: Not enough costing far too much

The new iPhone was announced on Monday. And I’m absolutely delighted with it: because I have no interest in buying one.

I’m delighted because I was half expecting a radical overhaul of the iPhone that would leave my favourite shiny gizmo looking sad and old and dated. I only got it six months ago, and I did so in the full and certain knowledge that there would be a new iPhone unveiled in the summer, so it’s not that I didn’t know the possibility was on the horizon.

It’s like buying any new piece of IT kit: you wait and you wait and you wait, and then whenever you decide to jump into action it’ll always be two days later that a new model is announced, a specification change is unveiled, or the price will tumble – leaving you with an old, lower spec or simply overpriced item on your hands that you can do nothing about.

So I expected to feel this way after Apple’s unveiling of the iPhone 3GS, and the truth is: I don’t. I’m as happy as can be.

For one thing, the new iPhone looks exactly like the old one. Or to put it another way, no one can tell at a glance whether my phone is shiny new or six months old. Even those with the original iPhone can still survive casual glances (it takes a real Apple geek to be able to tell the original from the 3G from a distance; needless to say, I now have that superpower!)

And the new features of the 3GS are distinctly ‘meh’ in my book. A digital compass? Voice control? Slightly improved camera (and at 3MP it’s not exactly state of the art even now)? Even video capture. None of these features are things I’ve ever expressed a need for. Nice to have, sure; but there’s no real pull for me to get these features and I can happily live without them. (After all, you’re talking to someone who was happy not to have any sort of camera on his mobile phone until last December!)

Okay, the thing will be faster. Who wouldn’t like to have a faster gadget? We all would. And I’m sure it’s very impressive and it’s no surprise therefore that this is the one feature that Apple have put front and centre with the name of the new iPhone (the ‘S’ in ‘3GS’ is for speed, the announcement proclaimed.) But I’ve been perfectly happy with the speed of my iPhone so as long as I stay well clear of seeing too many demos of the new phone’s blazing pace, I won’t miss what I don’t have there either.

Actually there’s one thing I would really have liked, and which almost made me hold off getting the iPhone 3G in the first place: the storage capacity. The 3GS has a 32Gb model, and the way that my music and podcast collection has exploded since I got my iPhone late last year, I could really, really do with the increased capacity over my present 16Gb.

But not at the prices that the iPhone is going to be sold for in the UK. Trying to compare contract prices is like herding cats, so instead I’ll quote the buy-outright, “pay-as-you-go” prices:

  • In the US, the old 8Gb 3G is being retained as a low cost entry model to try and grow the market and bring in new users. In the UK, the PAYG price remains an eye-watering £342.
  • The price for the 16Gb 3GS is £50 more than the 16Gb 3G model which is no longer available
  • The top-of-the-line 32Gb 3GS is £150 more than the 16Gb 3G that was previously the top of the line.

Contract prices are similarly higher (or require a longer contract commitment.) Would I want the 32Gb for that kind of additional premium? I think not. Even getting a 16Gb model at fifty quid more would give me considerable pause, and you’re talking to someone who things the iPhone is the best thing since humans discovered how to create fire. And to add insult to injury, the UK’s exclusive carrier O2 is taking a hardline about existing customers seeing out (or buying out) their full contracts before allowing them to upgrade, a very difference stance to 2008’s rollout of the 3G where customers could upgrade for free by taking out a new contract.

Why so much? Well, part of it is the currency exchange rate – the pound has tumbled against the dollar since this time last year when 3G prices were set. Much though we might like to bleat “that’s not fair!” the fact is that it’s the way the world works, and we should get over it. That probably accounts for the price ‘rise’ for the 16Gb models done purely like-for-like. But the huge premium for the 32Gb model seems bizarre (RAM just isn’t that expensive) and rumours are flying around that O2 over-subsidised the 3G and this year have to grab back some of their investment before the exclusive contract that they paid so much for runs out. (But on the bright side at least O2 are offering iPhone users MMS and – for a high price – tethering services. Unlike AT&T who refuse to offer this to US customers for any price.)

Whether O2 or Apple have been responsible for the pricing structure for the 3GS I don’t know, but it will have a major effect on 3GS take-up. I can’t imagine too many people upgrading, and there’s nothing new that would persuade new people to jump on the iPhone bandwagon. I suspect that iPhone sales this year will be in a holding pattern, and in a world where a lack of exponential growth is taken as a sign of failure I think we’ll see a lot of “Apple sales decline! iPhone launch a failure!” headlines in coming months. Apple’s charmed decade could come to a crashing halt in the reality of the economic credit crunch.

Maybe Apple knows this. Maybe they figure this year will be tough whatever they do. There’s no point reinventing the iPhone or doing anything eye catching with the price with the economy where it is; maybe they accept that those downturn headlines are coming regardless and they may as well suck it up this year and come back stronger in 2010 with a quantum leap iPhone 4. It would explain the atypically clumsy and hard-to-explain 3GS name of the new model – at least next year they get to move up to a genuine version 4.

And maybe they’re making the most of the continued absence this year of CEO Steve Jobs, still on medical leave. Everyone said that Apple’s product launches would be dull without him, and they have been, so there’s been no disappointment. Maybe the good stuff is being held back so that the raised expectations for Jobs’ return pay-off in spectacular headlines and sales. Maybe.

In the meantime I’m far more excited about the new iPhone software, version 3.0, which offers MMS and cut and paste and a host of new features. Ironically the upgrade is free, and for the sum total of £0 you get what essentially feels like … a whole new phone. So who needs 3GS right now? Not me.


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