Despite promising to avoid price wars that broke out last year after the launch of the iPhone 7, AT&T has broken the truce. The telecommunications giant is now giving away a free iPhone to anyone who buys another. To be eligible for the offer however, one must be subscribed to the DirecTV streaming service.
The offer will become available starting Friday and will apply to the iPhone 8 Plus, iPhone 8 and other smartphones. It was not clear whether the offer would be extended to the iPhone X which, with a starting price tag of $999, is the most expensive smartphone Apple has ever launched.
Last year due to the smartphone market having reached saturation, wireless carriers engaged in cutthroat pricing with regards to the iPhone. This had a negative impact on the margins the carriers enjoyed. According to research and analysis firm Jefferies Group, the cost that the wireless carriers incurred per subscriber as a result of the iPhone price wars was $200 in last year’s second half.
Though T-Mobile was the most aggressive in last year’s iPhone price wars, this time round the wireless carrier has indicated will not engage in such tactics. Rather the carrier intends to push an offer where customers will get $300 in trade-in-credits once they purchase the new iPhone 8 Plus, iPhone 8 or iPhone X. The iPhone the customers will be trading in must be relatively recent model – iPhone 6 and above. The device must also be in good working condition.
24-month redemption period
T-Mobile’s $300-credit for trading in will now however be given out in one go but will instead be spread over a period of two years. This means that those who trade in will get a monthly credit of $12.50 for the next 24 months.
Verizon Communications will also offer a discount of $300 for customers who purchase either the iPhone 8 Plus or the iPhone 8. To be eligible one must also sign up for an unlimited plan as well as trade in their old iPhone.
Compared to 2016, this year’s offers don’t appear to be as aggressive. Last year all the four major wireless carriers in the United States were offering credits of up to $650 according to BTIG Research. Per Drexel Hamilton’s analyst, Brian White, the less-generous promotions will still work out for Apple.
“It’s great for Apple because they’re starting to segment the market more, and now the consumers have more options,” said White.