Apple and consumers are in the driver’s seat as the wireless industry, with the launch of Apple’s iPhone 12 family, offers its most aggressive launch-day smartphone subsidies in at least five years, but the steep discounts may wind up hurting the carriers.
Analysts have been upbeat that Apple newly announced iPhone 12 family, which features 5G connectivity and a wider range of screen sizes, could drive a big wave of upgrades. Wireless carriers, eager to capitalize on the opportunity and avoid getting shown up by their rivals, are heaping on the promotions to both attract new customers and retain existing ones.
The most generous offer so far comes from AT&T Inc., which will give both new and existing customers an $800 credit on a new iPhone if they trade in an iPhone 8 or more recent device, in what the company says is a “limited-time” offer for those activating devices on one of its unlimited plans. The credit will be paid over 30 months and AT&T will give smaller credits to those trading in slightly older models than the iPhone 8.
“If someone is willing to pay you $800 for a phone that’s worth $100, that’s a pretty good deal for a consumer and for Apple, but it will obviously impact the balance sheet for the wireless carrier,” LightShed Partners analyst Walter Piecyk told MarketWatch. The $800 subsidy is the largest he’s seen on an iPhone launch day.
Verizon Communications Inc.’s best deal amounts to an $800 subsidy, Piecyk said, but it’s restricted to new subscribers on unlimited plans. T-Mobile US Inc. is offering half off the iPhone 12 Pro through bill credits, or $500 off any iPhone 12 device, to those who trade in their phones. The company has an offer of $850 off for those who add a line and trade in a phone.
MacDailyNews Take: Aww, everyone take a moment to shed a tear for the carriers, m’kay? 😀