Apple must not want the business

Apple launched its much anticipated update to iPhone today, called the 3GS. It has some good new features, such as a camera that actually takes decent pictures, video and sound activation. Price? $199 plus a two year contract with AT&T. That's the good news. The bad news is if you're an existing iPhone user and want to upgrade the price is... (wait for it) $599. In other words if you have been a good Apple/AT&T customer and want to buy the latest product you pay $400 more than someone who has waited until now. This seems crazy to me. They can clearly afford to sell the product at one price, so why charge existing users so much more? The argument is that if you haven't yet run down your old contract then you haven't yet given them the chance to recoup the discount they gave you on the phone you bought. But they ignored that fact when they launched the 3G. Therefore I can only assume that they don't really want existing users to switch. This also means that the iPhone's actually should retail at these crazy prices and the contracts are what bring the prices down. Even with this, surely an upgrade at some lower price could be justified by someone extending their existing AT&T contract by two years. My headline says Apple must not want the business. This is probably unfair. In truth it is AT&T that control this part of the pricing. I really hope some common sense prevails though and that Apple and AT&T get together and change this policy.