Sprint Counters T-Mobile's Low-Price iPhone Plan -- Update
September 24 2015 - 5:17PM
Dow Jones News
By Ryan Knutson
Sprint Corp. and T-Mobile US Inc. are racing to outdo each other
with iPhone discounts in advance of Friday's release of Apple
Inc.'s latest handset.
Sprint said Thursday it would let customers lease an iPhone 6s
for $1 a month, topping T-Mobile's $5-a-month offer, which it
unveiled Wednesday. Apple's newest iPhone hits U.S. stores
Friday.
The jockeying shows the importance both carriers place on the
iPhone's latest release. T-Mobile is looking to sustain a two-year
string of customer growth, and Sprint is hoping to end years of
subscriber losses.
Whether the offers are actually a good deal depends on the
circumstances of an individual consumer. Customers must trade in an
iPhone 6 to get the lowest monthly pricing, and the only way to
trade one in is to have it fully paid off. There are many places to
trade in phones that could result in higher payouts. There are also
pros and cons to leasing smartphones as well as installment plans
that enable you to own your phone.
Even so, the marketing battle over who has even the appearance
of cheapest plan is reaching new heights. After seeing T-Mobile's
offer on Wednesday, Sprint Chief Executive Marcelo Claure told his
team to come up with a better one, he said in an interview
Thursday. Roughly 10 employees stayed up all night to get the $1
lease plan ready.
"We had no plan to do it," he said. "We got into a room, looked
at the financials" and figured out a way to make it work, he
said.
The offers will give customers an excuse to keep going to their
wireless carrier for smartphones rather than directly to Apple,
which unveiled its own financing plan this month. Apple's leasing
plan, which includes a more robust warranty, starts at $32 a month
and gives customers the freedom to switch carriers each year.
The country's largest carriers, Verizon Communications Inc. and
AT&T Inc., have been much less aggressive in their offers.
Neither leases phones, though each does offer installment payment
plans. For the iPhone 6s launch, Verizon is offering up to $400 if
a customer switches carriers and trades in an old phone and
AT&T is offering up to $300.
Both Sprint and T-Mobile have a strong incentive to get
customers using the iPhone 6s because the handset has new
technology that will make it work better on their networks, said
Jennifer Fritzsche, a senior analyst at Wells Fargo. T-Mobile has
been adding low-frequency airwaves to its network that will result
in better coverage inside buildings and in rural areas. Older
iPhones don't work on that frequency, but the new iPhone 6s does.
Sprint has been adding a technology called "carrier aggregation"
that works only on the latest phones. Sprint customers with the
newest iPhones in some locations will see much faster data
speeds.
For both carriers, "the new iPhone should see noticeable
improvements in network experience, which we believe is the impetus
behind these recent moves," Ms. Fritzsche said in a research
note.
Mr. Claure said even though the carrier is leasing a new iPhone
6s for $1 a month, there still will be a strong market for the
older versions customers must trade in. Those used phones are
directed to consumers with phone-insurance plans and sold to
consumers overseas, he said.
Write to Ryan Knutson at ryan.knutson@wsj.com
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(END) Dow Jones Newswires
September 24, 2015 17:02 ET (21:02 GMT)
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