No plans for an upgrade to iPhone 3G

After looking at what is coming I have decided to stick with my current 1.0 version of the iPhone. I am curious how many current iPhone users will be scrambling out to buy the new and improved 3G model. I know there are stories about people lining up at stores around the world, but it is not clear what the mix is of existing users that want to upgrade and new users.

Why I plan to stay on the soon to be “outdated” iPhone 1.0.

• The iPhone 2.0 software upgrade is free to existing iPhone users. First, the software upgrade should be free, so no one should be giving Apple tons of praise for this gesture. In fact, it is in Apple and all the carriers best interest to make the upgrade free and to push everyone to upgrade in order to get people using the new features and new applications that soon will be available in the app store.
• The new iPhone App store will work just fine with my existing phone once I upgrade the software.
• The new 3G version is at best 2x faster then the existing model on the At&T Edge Network. However, the AT&T 3G network coverage is growing but when it is not available you will default back to the Edge Network and those speeds. I do the majority of my browsing on Wi-Fi, so the 3G would be a nice to have for me.
• The upgrade cost is not exactly a great deal for existing customer. Early adopters paid $599 per phone, which became $499 per phone after that great $100 rebate that showed up once Apple dropped pricing a few months later. Now the upgrade costs $199 or $299 upfront, plus you have renew your AT&T contract for a new 2 year commitment and then the kicker is that the plans are all more expensive. There is a great review by Walt Mossberg on all the hidden costs.
• The current iPhone is a great all in one device and I am certain pricing or specials will happen in the coming 12-18 months that will drive the device cost even lower. I think at an upgrade cost between $0 and $99 I would be in line on Friday, but at $299 for the version I want it can wait.

Figure 1 (from the Mossberg article mentioned above) The summary in this graphic hits the main points of how AT&T is just trying to nickel and dime people for SMS (200 messages are included for current users, but now $5 on the new plan, etc)