Thursday, September 24, 2015

Sprint, T-Mobile escalate war for new iPhone customers

Eli Blumenthal, USA TODAY 5:46 p.m. EDT September 24, 2015

The iPhone 6S and 6S Plus(Photo: Jefferson Graham, Jefferson Graham, USA TODAY)

An iPhone 6S for a single dollar? That's at the heart of an aggressive promotion from Sprint, which comes on the heels of a similar $5 monthly plan from rival T-Mobile.

It's all part of the smaller national carriers' plan to woo new customers from their larger competitors, Verizon Wireless and AT&T.

The details: On Thursday Sprint announced it would be offering an "iPhone Forever" plan for as little as $1 a month for the 16 gigabyte iPhone 6S, or $5 a month for 16GB iPhone 6S Plus. There's no upfront fee but you'll have to trade in an iPhone 6.

Larger capacity 64GB versions of the new iPhones will fetch $5.77 per month for the 6S and $9.77 for the 6S Plus, both with trade-ins of an iPhone 6.

Sprint CEO Marcelo Claure speaks at a the National Council of La Raza Annual Conference Monday, July 13, 2015, in Kansas City, Mo. (Photo: Charlie Riedel, AP)

A day earlier, T-Mobile said it would offer the 16 GB iPhone 6S for $5 a month with no upfront cost to customers, or the 16GB 6S Plus starting at $9 a month, also with no upfront cost. To qualify, buyers would have to trade in an iPhone 6 or 6 Plus or Samsung Galaxy S6, S6 Edge, Note 5 or S6 Edge+.

Those looking for higher storage options at T-Mobile can swap one of the above devices and get a 64 GB iPhone 6S or 6S Plus for $99 upfront, plus $4.00 in monthly payments for the 6S and $9 for the 6S Plus.

The payments are spread out over 18 months as part of T-Mobile's "Jump on Demand" leasing program, after which the company says you can purchase a 6S for an additional $254. Apple's current price for the phone is $649. Of course, T-Mobile hopes you'll to trade the phone in again when the next new model comes out.

You can trade in an older iPhone 5S or Galaxy S5 as well under T-Mobile's plan but you'll be paying more per month. Without a trade-in, monthly pricing starts at $20 per month for the 16GB iPhone 6S with no upfront fee.

Like T-Mobile's pricing, Sprint users can trade in older devices and receive a discount as well. Through the end of the year the carrier will be offering new and existing customers who are upgrade-eligible the ability to trade in any other smartphone and get a promotional rate of $15 per month in leasing the 16GB iPhone 6S, a discount off the regular $22 per month price without a trade-in.

Under both Sprint and T-Mobile's plans, you don't own the actual device, but instead are just leasing it from the carrier. You also will still need to pay for service.

"There's no need to 'own' an iPhone" any longer, Sprint CEO Marcelo Claure told USA TODAY. "We're making it simple… taking away the pain" of getting a new iPhone via a traditional contract.

Claure says the company is in the "final stages" of launching a similar program for Android phones dubbed "Android Forever."

Both carriers are hoping to capitalize on the traditional frenzy surrounding new iPhone launches, when millions of people buy the new devices. Last year Apple sold 10 million iPhone 6 and 6 Plus units worldwide during its initial launch weekend, with long lines in the U.S. seen at Apple Stores across the country.

"It stands to reason that (T-Mobile and Sprint) would come out with extremely aggressive pricing plans for customers," says Avi Greengart, Research Director at Current Analysis. "While these technically aren't contracts, what they are doing is inviting you to be put on plans where you get automatic upgrades. This effectively locks you to that carrier for a longer period of time, which is the only way these deals make any fiscal sense for T-Mobile and Sprint."

The new offers come as the U.S. market sees a shift in buying habits for cell phones, away from the traditional two-year contracts in favor of monthly payment plans. Apple will be offering its own monthly installment plans for the new phones, which include an unlocked device and extended Apple Care warranty, though it starts at $32 for the iPhone 6S.

Contributing: John Shinal

Follow Eli Blumenthal on Twitter @eliblumenthal

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Source: Sprint, T-Mobile escalate war for new iPhone customers

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