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.