I have to confess my initial reaction was the same as that of Daniweb colleague Bill Andad; the lack of a coherent upgrade path for the new iPhone 3G S is some sort of idiocy by UK operator 02.
But then I got to thinking. And it's not. It's unfortunate and I wish they'd change their minds, but I don't think the lack of a free upgrade is unreasonable.
The bad feeling started, I would guess, last July, when 02 decided that everyone who had one of the original iPhones would be entitled to an upgrade by altering their contract. Simple as that. This, my friends, is how you set expectations.
There are a couple of bits of background information you need, mind you. First, the original iPhone didn't sell as well as the (until next week) current version. It didn't tank, it just didn't set the world alight in the UK. Second and more importantly, to put the iPhone 3G on the UK map, 02 subsidised the handset. Someone sat down and worked out how much the contracts would have to be, how long they'd need to last, to make them appealing and commercial. A glance at the figures would have confirmed as much - of course a high-end phone wasn't going to be 'free', the cost was going to be spread over a contract period. Fair enough.
By now, Americans and other non-UK nationals will be wondering what this 'subsidised' thing is about. I believe - happy to be proven wrong - that we're unique in the UK in that our phone carriers have the option to subsidise a high-end phone in return for a long-term commitment from the customer. Clearly they can then spread the cost of the phone along the contract.
The problem is that customers don't always see it like that. The fact is that I'm locked into my iPhone 3G contract until January (and a lot of people are reacting badly to this idea, not only on this site but here, for example) not because 02 are being scumbags but because I haven't paid for it yet. I have the option to pay the contract off by all means, but it would be a lot of money.
This is where I get back to the expectations being set badly a year ago. The whole phone industry is at it, it's not just iPhones and 02. In the UK we're accustomed to having a shiny new phone with an 'invisible' price tag when we're on contract, pretty much when we want it. A lot of carriers will send you one if you threaten to change your contract. We're also pretty much used to a phone industry being awash with money, which just isn't the case any more. For those reasons, we react badly when someone offers us no upgrade path to a phone we'd like, particularly when it's the same brand and same series of phones.
There are undoubtedly questions still to be answered. The price of the phone here compared to in the US is vastly inflated. Why we can't just pay the remainder of the handset cost off rather than pay the call costs as well when we'll be paying for them again on a new contract is a mystery. 02 could move on this and restore a lot of goodwill.
But we've no particular right to expect a 'free' phone every time there's one on the market. That's simple financial reality.