Many people were surprised and a little frustrated but yes, it seems that you will not be able to upgrade immediately if you have an existing contract. That means that you will not be able to take advantage of the current prices for the iPhone 3G S 16GB and 32 GB
Well, the original iPhone was not really subsidized by AT&T. iPhone 3G is subsidized by AT&T which means that they will have an upfront subsidy to recoup... which means that those who have existing contracts with the iPhone 3G package would need to finish their 2yr contracts so that AT&T would not lose money!
This is actually a policy of a lot of carriers. It just won't make sense to lose money by subsidizing a phone model and then lose out when an upgraded model comes out!
Well, even if that is the case, I think that they would be clearer as to when you could qualify for the $199/$299 price. It seems that nobody at AT&T could give me just when exactly I would qualify for the 3G S subsidy! I've been told that it would depend on whether I purchased my original iPhone with AT&T. If you did, you need to finish 12 months of your contract. If you didn't, you need to finish 18 months. I don't think even people at AT&T is clear about it!
That's exactly what I've heard as well. That's how business works, unfortunately. I really am not a fan of contracts, and this is exactly the reason why. You'd think they'd want to encourage and support their current customers.