Report: Carrier phone financing will come to Apple Stores this year

2 Comments

Apple(s appl) is in the middle of a larger push to drive iPhone purchases through its stores: Earlier this year, it started selling prepaid plans with unlocked iPhones and now, according to a report from the always-reliable 9to5Mac, you’ll soon be able to pick up an iPhone on carrier programs that amortize the cost of the phone over the life of a two-year contract. Verizon’s(s v) Edge, T-Mobile’s(s tmus) Jump, and AT&T’s(s t) Next programs will all be available from the Apple Store.

Savvy consumers might recognize that these carrier upgrade plans aren’t a great deal. Although they allow consumers to upgrade their device early, after a year, when all the costs are added up, the overall price is similar to purchasing an unlocked phone. When upgrading devices using these programs, the old device — which is often fully paid off — is exchanged for the new one.

For consumers who aren’t price-sensitive and want the latest iPhone, they represent a convenient, carrier-approved way to do so without paying the full upfront price for an unlocked device. Whether the credit checks and carrier doublespeak required to sell these plans will affect the experience of shopping at an Apple Store remains to be seen.

Last year, Tim Cook told a gathering of Apple Store leaders that only 20 percent of iPhones are sold through Apple stores and that it was a goal of the company to see that number rise. One of the ways to do that is to reduce the overall price paid when leaving an Apple Store, and these carrier-driven programs do just that — we’ll see if it’s in place ahead of the expected release of a bigger iPhone this fall.

 

2 Comments

John Gibson

It will be interesting to see if there is any change in iPhone market share in the US as phone subsidies start disappearing. When there isn’t much difference out of pocket for a new iPhone vs a cheap Android phone on a two year contract of course the iPhone will do well.

I will find it fascinating to see what happens when purchasing an iPhone equates to something like $30 a month compared to $5 or $10 a month for a cheap Android or Windows Phone device. Will that impact iPhone market share or is it such a great product that it will do fine once users understand the true costs?

Kif Leswing

That’s the trillion dollar question, isn’t it. It is worth noting that in countries like Japan without common carrier “subsidies” the iPhone still sells well. But your point is still a good one, when looking at smartphones you’ve really got to look at the monthly cost of ownership, not the face value of the device.

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