Plan and Device Prices to Significantly Drop with iPhone 5?
Since rumors are really heating up regarding the potential for the next iPhone to make its way onto Sprint, it seems fitting to further discuss the effects consumers would see as a result of every major carrier selling Apple’s highly sought-after popular device. When it comes to pricing, everything could change for the simple reason that carriers would have to compete for iPhone customers. After all, iPhone 5 may very well become the most popular phone on at least one of the carriers.
Both plan pricing and service could see a great deal of improvement with competition. Now, choices for consumers that place phone selection as top priority would boil down to reliability and value instead. When AT&T had exclusive rights to the iPhone for its first three generations there was more flexibility for increased profit within plan pricing as long as Apple received its fair share. After all, customers had nowhere else to turn to if they wanted what many deem is hands-down the best phone on market. With phone selection between carriers becoming more seemingly unified and similar, carriers have nowhere else left to focus but service reliability and the value presented to customers. Of course, marketing and advertising will always play a big part as well but many can look past a big, snazzy ad campaign in return for a heavier wallet.
Subsidizations could become more significant for the same reason. AT&T and Verizon currently subsidize Apple’s price of $600/$700 down to the $200/$300 price customers are used to seeing on an iPhone 4 purchased with a two-year contract. As in, carriers pay for most of the device’s cost upfront then customers compensate them by committing to a service plan and regularly paying. (In case you were wondering, that’s why there are early-termination fees: so they can be reimbursed for the amount they had already given you so you could get a deal on a phone.)
If Apple allows it, I would not doubt a carrier price war shortly after release of iPhone 5. Perhaps the phone itself would even eventually reach the price everyone loves, free, if only for the sake of promoting a carrier. Making a multi-hundred dollar investment on each customer is a bold move, but one that could get somebody to commit to carrier a rather than carrier b. How many people would look twice if a free iPhone was offered to them by, say, Sprint? In fact, such an investment could be exactly what Sprint needs to reinvigorate its position in the mobile market.
It could only be a good thing for customers for more carriers to sell the iPhone. Fierce competition in the technology industry always leads to either strong deals or innovation.