T-Mobile USA will finally start selling the iPhone and enforce its plan to eliminate subsidies in “three to four months,” according to the company’s chief executive, John Legere. It will be the first time T-Mobile has offered in the iPhone in the United States since the handset was first released launched in 2007.
T-Mobile CEO John Legere has promised that buying the iPhone on his network will be “dramatically different” due to the carrier’s decision to abandon subsidized wireless contracts altogether. This is a huge move that could either make or break T-Mobile, and it will hopefully make buying smartphones like the iPhone a better experience for U.S. customers.
In most of the world, when you buy an iPhone, you pay a small initial fee upfront, but the rest of the handset’s price is baked into your two year contract, which you pay off in monthly installments. In India, though? It’s totally backwards… and totally bizarre.
AT&T may be subsidizing up to $425 of the cost of each new iPhone it activates for service when the 2.0 3G models launch next month, Barron’s reports.
According to Oppenheimer analyst Yair Reiner, AT&T will cover an additional $125 premium over the carrier’s typical $200 smartphone subsidy because the company thinks the iPhone will increase subscribers and average revenue per user. Apple will receive an additional $100 bounty for every new AT&T customer who signs for service at an Apple Store.
The early book on the new phone is very bullish, with Reiner calling for 15 million units to be sold in 2008 and another 33 million in 2009.