Some 16GB iPhone upgraders forced to sign 2-year contract extensions

[See the update at the bottom of this report. According to AT&T, 2-year contract extensions are not required when upgrading to 16GB iPhones]

Despite initial assertions by Apple retail store representatives to the contrary, it appears that some current US iPhone owners who have chosen to upgrade to the newly announced 16GB model are being forced to sign two-year extensions to their current AT&T contracts.

iPhone Atlas reader William Parnes owns an 8GB iPhone under contract with AT&T and purchased a 16GB iPhone from an Apple retail store. He was informed by employees that no contract extension was required for the new phone, and that he could simply activate the 16GB unit . Upon getting his iPhone home, however, Parnes found something different.

"The Apple Store told me I could just plug the new phone in and it would be activated on the old contract. But iTunes and AT&T insist that I have to establish a new contract. I've tried both the old and new SIM cards."

"I called AT&T and was told by rep and then her supervisor that it was not AT&T policy to allow upgrade without a new 2 year contract and that other information on the web and at the Apple Store was incorrect."

A poster to Apple's Discussion boards who attempted to purchase a 16GB iPhone at an AT&T store corroborated:

"I just came from the ATT store where I fully intended to buy the new 16GB iPhone (I have had an 8GB iPhone since day one and have loved it, though I think ATT isn't the best service provider). However, when the sales agent explained that I would have to re-up for another 2-year committment from ATT, I decided not to buy the new phone -- at least at this time. The sales agent said that my original 2-year plan would end the day I activated the new phone and a new 2-year plan would be initiated!"

Other users, however, were able to activate their new 16GB iPhones without extending contracts. Another Apple Discussions poster writes:

"I went down to AT&T store and bought an 16GB iPhone. To activate it, I had to choose that I was replacing a current phone with this iPhone. I kept the sim in the iPhone that the new 16GB phone came with. Activation was fast and easy and I am still where I was in my contract as I was yesterday, 6 months into the 2 years. The iPhone would not activate with the old sim card in the phone until I put the sim the new phone came with back into the new phone."

UPDATE: AT&T is now telling customers that a 2-year contract extension is not required. iPhone Atlas reader William Parnes (above) tells us:

"Today's adventure with ATT: Prior to returning the phone to the Apple Store, I called the ATT service number one further time to verify last night's information. Today, the rep on the ATT-Apple iPhone help line called his contact at ATT. She stated on a 3-way call that there would be NO extension of the contract (still expires 6/2009) and that she would put a note to that effect in my account record. She gave me her name as well. Trying to activate the new phone now."

Feedback? info@iphoneatlas.com.