Today Leap Wireless, parent company to Cricket, announced that it has partnered with Apple to bring the iPhone to the U.S. prepaid market for the first time. Starting June 22nd, customers will be able to buy iPhone 4 and iPhone 4S models from Cricket on a prepaid wireless plan. The iPhones have been substantially subsidized by Cricket, indicating that the carrier is taking a financial hit to hop on the Apple bandwagon.
Cricket offers an unlimited talk, text and data plan for only $55 (throttled after 2.3GB of usage), and customers can purchase the 8GB iPhone 4 for $400 off contract. The 16GB iPhone 4S is available for $500 off contract. These are the only two iPhone models Cricket will have available in June.
“Our customers want the best products available and we are excited to bring iPhone to our pre-paid consumers with an industry leading $55 per-month service plan,” said Doug Hutcheson, president and chief executive officer, Leap Wireless International, Inc. “Launching iPhone is a major milestone for us and we are proud to offer iPhone customers attractive nationwide coverage, a robust 3G data network and a value-packed, no-contract plan.”
Unlike AT&T, Verizon and Sprint, Cricket customers are not locked into a contract that prevents them from upgrading phones, switching around plans, or terminating subscriptions altogether. Carriers that offer 2-year contracts are able to offer smartphones for cheaper retail prices so customers can pay the full, unsubsidized cost over time.
Apple offers unlocked, contract-free iPhones for about $150 more than Cricket ($650 for the 16Gb iPhone 4S), so the prepaid carrier is obviously paying out of pocket to offer its subscriber base a deal on the iPhone. Sprint took a similar financial gamble when it brought on the iPhone last October.
This is the first time a major U.S. prepaid carrier has offered the iPhone, so it will be interesting to see how well sales go. Sprint owns Virgin Mobile and Boost Mobile, two other large prepaid networks, and we wouldn’t be surprised to see the iPhone make its way their as well.
The iPhone will be available in Cricket stores and select dealers June 22nd in 60 U.S. markets. Customers can register on the Cricket website for more information.
Update: Apple has officially commented on its partnership with Cricket:
By making iPhone available on pre-paid plans through Cricket Wireless, we are making the best smartphone more accessible to an even broader market in the US.
Image: Chicago News Report.