U.S. cellphone carriers are offering their most generous discounts in years, handing some customers brand-new devices for no money down or small monthly payments stretched over many months. AT&T kicked off the trend in October by offering high-end smartphones such as the iPhone 12 free with an eligible trade-in device. Its discount later dropped to $700, which covers the entire price of an iPhone 12 Mini and most of a standard iPhone 12 – essentially free Apple iPhones. Verizon followed on Tuesday by offering trade-in credits of $700 toward new iPhones.
The discounts from AT&T Inc., Verizon Communications Inc. and T-Mobile US Inc. require customers to make long-term commitments that give carriers the stability they need to reassure investors as they increase spending on 5G network upgrades.
“It’s essentially a contract,” said Jeff Moore, the head of telecom research firm Wave7 Research. “We’re seeing carriers locking in the customer base that they have as opposed to encouraging switchers.”
The free-phone strategy is a throwback to the wireless market a decade ago, when U.S. carriers subsidized the price of most new smartphones in exchange for subscribers’ guaranteed monthly payments…
T-Mobile is offering trade-in credits worth up to $1,000 toward new smartphones paid off over two years. Its offer covers a wider range of mobile data plans but only applies to customers activating a new phone line.
MacDailyNews Take: Free Apple iPhones! (Unless you cancel service early, then you have to pay the difference, of course.)