There’s a really cool feature in today’s new iPads that got zero stage time during the keynote. Apple has built its own SIM card that allows the user to switch between different carriers and plans right from iOS.
Slowly but surely, T-Mobile has been trying to not only become the leader of the prepaid cell phone market, but to totally corner it. It’s latest ultra-simple plan takes that mission even further, making pay-as-you-go as simple as $0.10 per minute or text, flat.
Yesterday, AT&T announced new Mobile Share Value plans that were pitched as making subscriber’s monthly rates cheaper if you already own a smartphone.
It seemed like a pretty honest move. Most carriers bill you a set monthly that includes a fee designed to pay off your smartphone’s full prive over a two year period, which is common knowledge. What isn’t common knowledge is that on most carriers, even if you bring your own smartphone to your contract or fully pay off your device, the carrier will continue to bill you for that smartphone subsidy in perpetuity. It’s super sleazy, so AT&T’s move seemed like a refreshing dose of honesty.
Right now, Apple sells three generations of iPhone. The iPhone 5 is the high-end phone, starting at $199 on contract. The iPhone 4S is the mid-tier device, and costs $99 on contract. Finally, there’s the iPhone 4, which is free on contract.
Come September 10th, though, Apple’s going to change things up with the colorful iPhone 5C, a device that Cupertino has designed from the ground up to be a modern budget iPhone (rather than just a hand-me-down iPhone a couple generations old). So the iPhone 5S will take the high-tier, and the iPhone 5C will take the lower-tier.
What about the mid-tier, though? Evidence suggests it’ll be the iPhone 5.
Two months ago, Verizon announced that it wouldn’t allow customers to upgrade their iPhones early after twenty months anymore. It was a pretty hostile move: the subsidy you’ve paid for your iPhone has been paid off after twenty months, so Verizon was effectively saying that their new policy was to bleed you dry for an additional four months, no exceptions.
When we wrote about Verizon’s move, we said “And what Verizon tends to do, AT&T can usually be expected to follow. How long until AT&T ends 20 month eligibility for early upgrades too?”
The answer, as it turns out, is a little under two months.
Hey, T-Mobile is finally an iPhone carrier now! Not only that, they’re a pretty competitive one, offering you an iPhone 5 for just $100 down and $20 a month over 24 months in what the nation’s fourth-largest carrier is calling a “no bullshit” plan. If you buy an iPhone 5 at T-Mobile, you can leave at any time as long as you pay off your device; otherwise, your service is provided month by month.
Sounds pretty great, but how competitive is T-Mobile’s new iPhone plan compared to the competition really? We compared the cheapest T-Mobile iPhone 5 plan you can get against the 24 month cost of getting one from AT&T, Verizon, Sprint, Cricket, Virgin Mobile and Straight Talk. The result? T-Mobile is one of the cheaper plans around… but it’s not the cheapest.
Is your bill over $100 a month? If so, you’re in the majority of iPhone and Android users.
Want to know why a carrier like Sprint is willing to promise Apple almost $16 billion to get the iPhone on their network, or why carriers put up with paying astronomical subsidies just to get a single iPhone customer on their network?
As usual, it all comes down to the crisp, president-branded cabbage. According to a new study, almost 60% of iPhone users spend more than $100 a month on their wireless plan, compared to only 53% of Android users.
How much longer can Apple keep milking the carriers?
Apple and the U.S. carriers have always had a bittersweet relationship. Carriers love Apple because the iPhone brings people into their stores, but carriers are also pressured by Apple to pay high subsidies so that Apple can maintain its high profit margins.
Given that there’s way more competition for the iPhone these days, Apple’s chokehold on the industry is starting to loosen. Carriers are trying new business models for selling smartphones. T-Mobile recently announced that it would be doing away with subsidized two-year contracts altogether. Instead, customers will pay a cheaper price up front for a device like the iPhone and then pay monthly installments towards the full price of the phone.
Carriers want to drive retail prices down on smartphones so more people will buy, and Apple may have to adapt to that model in the near future.