Why do replacements cost so much?????

Question

I paid $299for my iPhone 3gs with ATT in January. It appears to be lost tonight....I believe stolen. I've suspended it w/ATT so I don't get any more charges.
I've had a host of disappointments because of this. When I could get insurance through ATT, they would replace a stolen phone for free. They don't cover insurance on the iPhone so I had to get the Apple Care plan...and from what I'm reading, they only replace damaged phones.
So I thought, well, I guess i'll just have to part with another $299. But the Apple and ATT sites say the cheapest I can pay is $399???? $499 to get another 16 gb one? This doesn't seem fair. I love my iPhone, but now I feel like I'm being punished by choosing it.

Answer 1

The full retail price for the 3GS is as follows:
$599 for the 16GB, and $699 for the 32GB.
As already provided, you paid AT&T's fully subsidized price for the iPhone which requires signing a two year contract for the subsidy or discount that AT&T paid Apple on your behalf. You must fulfill the contract term for the existing subsidy that AT&T paid Apple on your behalf for your iPhone that was lost before being eligible for AT&T's upgrade or fully subsidized price with another new phone. The same applies with EVERY carrier in the U.S. in regards to a subsidized phone. Certainly this isn't your first rodeo in regards to a subsidized phone, but those with a lost or stolen iPhone seem to quickly forget all about this from previous subsidized phones, or think it should be completely different with Apple and the iPhone compared to EVERY other carrier and cell phone manufacturer for some reason.
With AT&T, most subscribers qualify for upgrade or subsidized pricing with a new phone at the 18 month mark of an existing two year contract for an existing subsidized phone. The same applies if you hadn't lost your iPhone and wanted to get a new model when released, or if your iPhone is lost or stolen.
AT&T's 3rd party insurance carrier/provider for phones has chosen not to cover the iPhone - probably due to the replacement cost and the iPhone being a much bigger target for a thief than any other phone at the present time.
When I could get insurance through ATT, they would replace a stolen phone for free.
Not with a phone in the smart phone category you couldn't. I've had insurance for other phones with different carriers and the one time I used it, I was charged a $50 deductible and the phone was not in the smart phone category.
You didn't have to get the AppleCare plan. This is by choice just as getting insurance for a phone when offered by a carrier's 3rd party insurance provider is by choice. Before I purchased insurance for a phone when available in the past and the same for the AppleCare plan, I read the details - what is covered and what isn't, etc. The AppleCare plan is an extended warranty only - it extends the standard one year warranty by an additional year and provides free telephone support for a full two years along with some other benefits in the event your iPhone needs to be exchanged under warranty and there isn't an Apple store nearby.
AT&T offers a partially subsidized price or early upgrade price for the iPhone which is as follows:
$399 for the 16GB, and $499 for the 32GB.
So you are being provided a partial discount off the full retail sales price for a replacement iPhone but not the full discount since you haven't fulfilled your existing contract for the existing subsidy that AT&T paid Apple on your behalf for the iPhone that YOU lost or that was stolen.
This is how it works in regards to a subsidized phone with EVERY carrier and with EVERY cell phone manufacturer.