TMoNews first reported the price increase, and notes that nowhere did T-Mobile make it clear at the time that the $99 down payment was only a temporary or introductory pricing.

The iPhone 5 pricing was part of what made T-Mobile’s big new “no-contract” phones push so attractive. From our coverage in March:

T-Mobile will finance the iPhone 5 for a down payment of $99.99 and payments of $20 each month for 24 months. That works out to $580, which is actually cheaper than the unsubsidized, unlocked device price of $650 Apple charges today.

Part of that plan included “eliminating subsidies” that end up chaining U.S. wireless customers to carriers via expensive two-year plans. We don’t know how much T-Mobile has to pay Apple for each device. It’s possible the pricing change could have been planned all along, or it could be that T-Mobile realized after a month that it can’t afford to keep subsidizing smartphones that much.

T-Mobile clearly isn’t ready to clarify what its motivation was. When asked if this pricing hike was always planned, I received this statement from the carrier: “As America’s Un-carrier, T-Mobile is committed to introducing the hottest new smartphones at unbeatable promotional prices – but we all know promotions are temporary.”

As a result, the cheapest T-Mobile iPhone 5 won’t have a total cost of $579 anymore, but will jump up to $629, including the $20 monthly payments for 24 months. There’s nothing illegal about that. But if T-Mobile did intend that this was temporary pricing when it first advertised these prices, the fine print must have been really small. And that’s disappointing.

The carrier’s posture since it first announced changes to its business model has been concentrated on being different and to standing out from its fellow U.S. carriers. But this pricing change comes off like nothing more than an advertising bait and switch. And there’s nothing different about a U.S. wireless carrier that gives its customers reasons to complain.

This post was updated with a comment from T-Mobile at 2:05 p.m. PT.

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MetroPCS’s current customers can choose from a variety of feature phones or inexpensive Android-powered smartphones: there’s just one flagship Android device offered, the Samsung Galaxy S III. The vast majority of the devices cost around $99. If MetroPCS subscribers have been waiting for an opportunity to switch to an iPhone, it’s probably less likely they’ll be going for a $200 to $300 iPhone. But the free-on-contract iPhone 4 or $99-with-contract iPhone 4S could be more appealing than their current options.

This also represents a chance for MetroPCS to convince feature-phone owners to upgrade too. And the trend among late-stage smartphone adopters is that they, in general, go for lower-cost devices.

A recent survey of iPhone buyers in the U.S. by CIRP showed while the iPhone 5 represented a little over half of all new iPhones purchased, that is a historically low number: never has an Apple device that’s been available for just over one fiscal quarter seen such slow demand. The iPhone 4 and iPhone 4S, either free on contract or $99 with a contract, are more popular than legacy iPhones have ever been.

T-Mobile says that by joining with MetroPCS, it’s bringing 9 million new customers — and potential new iPhone activations — with it. That might seem small when compared to what T-Mobile already has (a little over 30 million customers) and to what could happen if Apple hooked up with China Mobile. But at this point, Apple needs to expand its footprint anywhere it can. Whether that’s among luxury-brand hungry customers in Tokyo, Shanghai or Moscow who shell out for an iPhone 5, or among smartphone hold-outs who just want a free or very cheap phone, Apple is going to take it.

Last week, Apple CEO Tim Cook used the example of first-time iPhone buyers in China to explain why he’s OK with this scenario: ”China has an unusually large number of potential first-time smartphone buyers and that’s not lost on us. We’ve seen a significant interest in iPhone 4 there and have recently made it even more affordable to make it even more attractive to those first-time buyers. We’re hopeful that helps iPhone sales in the future.”

It’s true that trading iPhone 5 sales for the iPhone 4 or 4S could mean lower profits in the end for Apple. But being able to sell smartphones to people who otherwise wouldn’t have purchased an iPhone (either for a feature phone or a cheaper Android device) is not a bad fallback.

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It also found that the rest were iPhone 4 and iPhone 4S models, which sell for free with a contract or for $99 with a contract, respectively. That breakdown is slightly improved from December, when a CIRP survey shows that just half of all iPhones sold were the newest model iPhone 5.

CIRP January through March iPhone model purchases

This is a very different sales pattern than what we saw in the second quarter of the iPhone 4S’s availability. When that device was the latest model, it accounted for 73 percent of all iPhone sales in April 2012, a significantly larger share than the iPhone 5 had as of March, according to CIRP, whose data comes from a survey of 500 customers who’d recently bought an Apple device.

The iPhone 4S sold 33% of all iPhones in the survey period, while the iPhone 4 represented 14% of all iPhones. In contrast, in the similar period following the launch of the iPhone 4S, the lower-priced iPhone 4 represented 22% of sales, and the free iPhone 3GS represented 5% of sales.

As a share of iPhones sold, 33 percent is the highest share a legacy model iPhone has carried in at least the last two years, according to CIRP’s data. Apple wants to sell iPhones no matter what, but ideally it wants to sell more of the most expensive iPhones, not the severely discounted and free-on-contract devices; that way its average selling price stays high.

Something similar is taking place with iPads, CIRP found: Between January and March, the iPad 2 — which originally debuted in early 2011 — grabbed a larger share of iPad sales, up from 27 percent to 32 percent. The newest model, the iPad with Retina display, dropped from 43 percent of sales in the holiday quarter to 36 percent of sales during the January quarter. Meanwhile, the smaller and cheaper iPad mini grew slightly, from 30 percent to 32 percent of sales.

It’s not really a mystery that cheaper Apple devices, even when the devices are not the latest model, are attractive to buyers when viewed against the competition. What is a mystery (until tomorrow anyway) is how this affects Apple’s balance sheet.

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Friday is also launch day for the T-Mobile iPhone. It is the last of the major U.S. wireless providers to get the iPhone, and as a result is looking for ways to boost its appeal to potential customers beyond its unusual new payment plan structure.

T-Mobile’s new no-contract payment plans, introduced last month, mean customers can walk out of a store with a new iPhone 5 for $99, with $20 monthly payments for the next  two years. It actually works out to be cheaper than buying an unlocked, full-price iPhone directly from Apple by about $70. The plans are also slightly less pricey than what T-Mobile competitors are offering.

While the pricing does work out to be slightly cheaper, the fact that T-Mobile is getting the iPhone so late in the game — AT&T has had it for almost six years; Verizon for two, and Sprint for about 18 months — means many customers have already settled in with a provider. T-Mobile’s novel pricing plans are intended to appeal to people who may not otherwise have considered an iPhone or a smartphone; but this trade-in deal also could interest people who are at the end of a contract on an older iPhone and could be tempted to find a carrier offering the best deal.

The trade-in offer is available to ”well-qualified customers” (those who can secure financing for the payment plan) through June 16.

This post was corrected at 9:39 a.m. PT to reflect that “well-qualified”customers don’t have to pass a credit check, just secure device financing.

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In this brief video, I show you how the case works in locations where my wireless network generally sucks. We have 75 Mbps FiOS broadband service with a new 802.11 a/c router and yet in a few rooms, the Wi-Fi is generally useless. And outside of the home far from the router? Same story. Yet in both of these locations, you can see the positive impact made when use the Linkase with my iPhone 5.

The magic is in the slide-out EMW, or electromagnetic waveguide element, which works with phone’s internal Wi-Fi antenna for the boost. I’ve done plenty of tests with the $49 Linkase — not just what I show on video — and it generally works as advertised. Wi-Fi signals are typically much better with the EMW element extended although it really only works in areas with poor or marginal signal reception. Don’t expect Wi-Fi to be faster where it’s already pretty solid.

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Here are the stories that emerged from the event:

• T-Mobile launches LTE with a bang, the iPhone 5 and no contracts
• It’s finally here: T-Mobile iPhone 5 goes on sale April 12
• T-Mobile is ending subsidies and contracts, but it’s still locking phones
• T-Mobile’s new LTE network is fast, but it’s going to get a lot faster
• Samsung Galaxy S 4 hits T-Mobile around May 1 for $99 plus monthly payments
• Why Apple doesn’t need a cheap iPhone if T-Mobile does it for them

T-Mobile image courtesy of Flickr user swruler9284

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Indeed, T-Mobile is using a similar pricing model for the iPhone 5: Customers pay $99 for the handset and tack on $20 per month to their bill to pay off the handset over 24 months. Even if the T-Mobile consumers opt for the most expensive Simple Choice plan — $70 for unlimited talk, text and mobile web — the interest-free hardware payment plan keeps the bill to a manageable $90 or so per month.

I suspect customers in the first seven official T-Mobile LTE service areas will initially be more apt to choose the T-Mobile version of the Galaxy S 4 or iPhone 5 going forward. But the company plans to have 200 million covered by LTE by year-end, so an aggressive LTE rollout schedule could increase potential customers for either of these phones.

And depending on the amount of the monthly payment — I anticipate it to be $20, just like for the iPhone 5 — T-Mobile’s Galaxy S 4 could cost less than the same phone model from its peers, pending their official pricing, of course. In the case of the iPhone 5, that price is $579, which is $70 cheaper than buying a full-priced iPhone 5 from another carrier.

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The new Galaxy S 4 — using Qualcomm’s 1.9 GHz Snapdragon 600 — also returned a score higher than the new HTC One, which also uses a Snapdragon 600. The HTC One Score of 2687 is likely due to a slower version of the chip; it clocks at 1.7 GHz, likely to balance performance and battery life. Here’s a full chart of the Geekbench 2 scores:

While synthetic benchmarks are a good indicator of performance, that’s all they are: indicators. There are many tests available to use on smartphones that check performance for specific features. Mozilla’s SunSpider or Google’s Chrome Octane tests, both challenge a phone to run through JavaScript tests, for example. So it’s possible that the Galaxy S 4 won’t be the fastest phone at every single task.

However, raw performance is key when it comes to many smartphone tasks. The responsiveness of the user interface is a perfect example; swiping to another home screen should be instant at this point, for example. Processing of high-definition videos and still camera images is another area that benefits from hardware performance. Samsung’s AirTouch hovering isn’t much use if it takes too long for information to pop up. And of course, if you’re a gamer, you want the chips in your smartphone to offer the fastest frame rates and greatest visual details.

One of the reasons for Samsung’s smartphone success over the past three years is a large marketing effort. I suspect the company will latch onto benchmark tests such as these and pound out the message repeatedly that its phones best all others in terms of speed.

Surely, the next iPhone and other Android devices will offer improved performance thanks to the newest chips from Qualcomm, Nvidia and even Intel, but for until that happens, expect Samsung’s marketing team to make a big deal about this aspect of the Galaxy S 4. And once it debuts the phone with its 8-core Exynos chip, that message of speed will only be amplified.

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Siri

Expectation: This is an iOS 6 issue, but I expected to use Siri on a near-daily basis.

Reality: I use Siri on a near-daily basis. With iOS 6 she got better, and I frequently have a desire to send and receive texts while operating a motor vehicle. Looking at the phone and typing while doing this, I’ve heard, is frowned upon. So I use Siri instead. For the most part, she does a decent job. I’ve learned the hard way to keep my messages short. I don’t really use Siri to create Reminders, move calendar events, and the like. I do, however, use her to check on when the Red Sox are playing and what the score is.

What I’d like to see improved: I don’t like her all-or-nothing option to change a text message. I’d love to be able to tell her to replace a word. Often, in a multi-sentence text she’ll get it correct, except for that one word that’s crucial to understanding the meaning of the message.

The camera

Expectation: I expected that the iPhone 5 would continue to replace my point-and-shoot camera.

Reality: Even with the purple haze problem, the iPhone 5 has indeed solved my needs for a point-and-shoot camera.

What I’d like to see improved: Maybe a little better image focus and stabilization. If I’m shooting a picture of a handheld object and my hands are slightly shaking, I’ve noticed the iPhone auto-focus is tad sensitive. I imagine the camera on the iPhone 5S (or whatever the next-generation iPhone is called) will be better in ways I won’t be able to detect, but I think the iPhone 5 camera is good as is.

The screen

Expectation: It would be really different than the iPhone 4S screen.

Reality: Well, it’s certainly taller.  The extra row of icons is helpful. With the previous screen size, I always had apps I use frequently sitting on the second screen. Now, all the apps I use often are one screen. Apps like Twitter, Facebook, Notes, and Evernote feel more comfortable with the taller screen. The Kindle and iBooks apps feel like I’m reading from a weird legal size paper. Other apps seem to think the extra real estate is perfect for showing me more ads — I’m looking at you, The Weather Channel.

I was hoping I would use Pages more, but it still doesn’t seem to adapt well to the large screen. In fairness, this complaint may be me moving the goal posts since even on my Nexus 7 I’m not doing any writing. Nor do I feel my life is really missing an iPad mini, either.

What I’d like to see improved: I agree with Andy Ihnatko’s take on the Samsung Galaxy S3 screen. I frequently keep my iPhone in a car mount where it sits right in that hard-to-see range for my old guy eyes. I want to see Apple release a larger screen. There are few things that tempt me towards Android phones, and the screen size is always the demon on my shoulder.

My workflow

Expectation: The iPhone would continue to be command central for my life.

Reality: It still remained command central, but my iPad usage for non-leisure activities increased. This isn’t an indictment against the iPhone per se, and it likely has more to do with buying an iPad with cellular connectivity this time around, along with a keyboard case. However, the majority of my communications, note-taking and task management functions have been on the iPhone 5. What was previously an 80-20 split is now about a 70-30 split. For long-form writing away from my Mac, the iPad will likely always win that battle.

What I’d like to see improved: A system-side sharing feature like there is in Android. I absolutely love that I can send links to Instapaper and Evernote in Android with one easy click, as long as the app is installed. No messy bookmarks to install.

Final thoughts

My only regret with the iPhone 5 is self-created: Instead of opting for a 64 GB phone, I bought the 32 GB and AppleCare+. I should have bought the 64 GB as I’m now struggling to find room for my music. I’m swapping out albums more than I’d like. I bought AppleCare+ because I expected for financial reasons that I’d skip the 2013 iPhone update and wanted the extra coverage — I was too far off my upgrade cycle for any discounts last year, so I’m going to wait until I don’t need to pay the off-contract price.

I’m impressed with the overall sturdiness of the iPhone 5. I don’t keep it in a case, and with the metal back I don’t feel like it’s going to shatter with a bad fall. I don’t seem to have as many weird cell reception issues as I had before. I work in a section of a building with notoriously bad cell coverage (about 1 bar), but outside of that, I don’t seem to have many “you’re holding it wrong” issues. The LTE speeds are nice, I just wish AT&T’s coverage net was wider. I get LTE at work, but not near home.

Overall, I’d say the iPhone 5 met my expectations. While I’d likely buy an iPhone with a larger screen, I do like that the iPhone 5 is the same width as previous iPhones; it’s not too bulky in my pockets.

Next time, though, I’m getting the largest storage option available. I guess size does matter after all.

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