“Apple Inc. launched a broadside Wednesday against wireless phone companies, saying it will for the first time finance iPhone sales directly to customers without requiring them to be tied to any particular carrier,” Thomas Gryta and Ryan Knutson report for The Wall Street Journal. “The new finance offer reflects competing pressures on Apple, which seeks more buyers to upgrade their phones each year, and the wireless carriers, which look to keep their customers from switching to a rival. Apple will offer a monthly fee of $32.41 over 24 months for its cheapest iPhone model under the new program announced Wednesday at the latest iPhone launch. The deal allows customers to get a new device each year, as well as select their carrier with each upgrade.”
“Denny Strigl, Verizon’s former chief operating officer, said Apple’s move is a sign it wants to wrest control of customers from wireless carriers. Companies that control the customer relationship have more leverage in pricing and sales, he said,” Gryta and Knutson report. “If customers go to Apple to finance their phones and choose a carrier, for example, Apple will be able to steer that customer’s decision, and possibly guide them toward a carrier with a cheaper service.”
“Mike Sievert, chief operating office of T-Mobile praised Apple’s move, saying it would allow customers to try out other carriers,” Gryta and Knutson report. “Sprint Chief Executive Marcelo Claure said in an interview that the tension between carriers and Apple is less about customer control and more about two year contracts, which discouraged customers from buying new iPhones each year. ‘Apple is trying to do nothing more than shorten the cycle so they can sell more iPhones,’ he said, adding that he believed that’s what customers want, too. Since Sprint launched an annual upgrade plan last month, 90% of new customers have bought it.”
Read more in the full article here.
MacDailyNews Take: Here’s to churn and the frenzied competition it creates! Lower wireless data prices benefit everyone but the dumb pipes.
How Apple’s annual iPhone Upgrade Program works and how much it costs – September 9, 2015
[Thanks to MacDailyNews Reader “Arline M.” for the heads up.]