And so it begins. The promised truce among wireless carriers is over.
After vowing to avoid a repeat of the blistering iPhone price war of last year, AT&T will fire the first shot - offering a free iPhone with the purchase of another, for customers who also subscribe to its DirecTV satellite service.
The buy-one-get-one-free promotion starts Friday and applies to the iPhone 8 and 8 Plus, among other phones. AT&T hasn't said whether the deal will be extended to Apple Inc.'s most expensive phone ever - the $999 iPhone X, aka 10 - which marks a decade since the company entered the phone business.
Under pressure to find new customers in a market where every adult already has at least one phone, the wireless companies duked it out with cutthroat pricing on the iPhone last year. The giveaways took a toll on margins, costing about $200 (roughly Rs. 12,800) per subscriber in the second half of 2016, according to Jefferies Group LLC.
"We had to over-promote" to compete with plans from rivals such as T-Mobile US, but that further improved customer loyalty, Verizon Communications Chief Executive Officer Lowell McAdam said in an interview Wednesday at Bloomberg's Sooner Than You Think conference in New York.
T-Mobile, which was the first and most aggressive on price last year, said it was steering clear this time around. Instead, the company plans to offer a $300 (roughly Rs. 19,000) trade-in credit for customers buying the iPhone X, as well as the new 8 and 8 Plus. The trade-in must be an iPhone 6 or newer.
The other top carriers have been relatively restrained so far.
- Sprint Chief Executive Officer Marcelo Claure, in a series of GIFs on Twitter Tuesday, introduced a half-off lease for the iPhone 8 and 8 Plus. The deal requires a trade-in of the iPhone 7.
- Verizon is offering a $300 credit on the iPhone 8 and 8 Plus with trade-in. The company's list price for the iPhone 8 is $699.99 or $29.17 a month for 24 months, and $799.99 for the 8 Plus or 24 monthly payments of $33.33.
- AT&T customers who purchase an iPhone can also get an iPad for $99.99. The deal requires a 2-year wireless service contract.
- All the carriers sell the connected Apple Watch. The device needs a $10-a-month data plan. As part of the deals, carriers are giving away the first three months of wireless service.
© 2017 Bloomberg L.P.
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