A New York man yesterday sued Apple in federal court, claiming that the company misled him and others when it pitched the iPhone Upgrade Program last year.
The lawsuit asked for class action status, a move that if approved would let others join the case.
Emil Frank of Brooklyn, N.Y., complained that he had not been able to pre-order an iPhone 7 or 7 Plus on Friday because Apple limited the number of devices for Upgrade Program participants while letting others reserve new phones.
"[Apple] allowed non-iPhone Upgrade Program customers to snap up the limited inventory of the new devices while telling countless iPhone Upgrade Program customers to 'check back later,'" Frank asserted.
Apple unveiled the iPhone Upgrade Program last year when it rolled out the iPhone 6S and 6S Plus. The program -- a rival to the pay-as-you-go plans that U.S. carriers push -- lets customers pay monthly fees for a device. The AppleCare+ after-sale warranty plan is part of the deal, as is the right to get a new iPhone annually. After 12 payments, customers may turn in an older iPhone, re-enroll, and begin paying for a new model.
Analysts characterized the Upgrade Program last year as yet another way for Apple to lock its customers into its ecosystem. The plan is available only in the U.S., and only through Apple's brick-and-mortar stores.
Frank was frustrated when he tried to order a replacement for his current iPhone 6S Plus.
"Mr. Frank woke up at 2:45 a.m. New York time [on Sept. 9] and was shocked to find that within moments, it was impossible to find an iPhone under the program anywhere near his location in New York City," the lawsuit stated. "He began searching in other parts of the state, as he was willing to drive to Buffalo or Albany to get access to his new phone, all to no avail. He expanded his search as far as North Carolina and Maine: nowhere was he able to get the iPhone model he desired."
Because he was unable to pre-order an iPhone 7 or 7 Plus under the Upgrade Program, Frank purchased a new phone for around $950. But he will still be obligated to make another year's worth of payments on his iPhone 6S Plus.
Frank's argument was that while Apple had a large stock of new iPhones to distribute as pre-orders, it limited the number it allocated to each store that were to be set aside for Upgrade Program participants. Most of those who signed up, Frank's lawsuit contended, would thus not be able to get a new iPhone with 12 months of their prior purchase, as Apple promised.
If a participant bought an iPhone 6S under the program last September, but did not receive a new iPhone 7 until November, he or she would end up making 14 payments, not 12. That, in turn, would delay the right to a new next iPhone to November 2017, at the earliest.
"Shockingly, the very customers who are most likely to value receiving new iPhones as soon as they are available are the ones Apple courted with their iPhone Upgrade Program," the suit read. "These customers are now in a worse position than every other iPhone customer because they joined the program."
Frank's lawsuit charged Apple with violations of both federal and California state laws, and besides seeking class-action status, demanded unspecified "compensatory and punitive damages."
Frank was represented by Boston-based law firm Block & Leviton, which on its website solicited other Upgrade Program participants who "have been affected by these issues."
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