Carriers are overpaying for old iPhones to win new Apple 5G customers

From MarketWatch’s “The 5G iPhone is reigniting the subsidy wars, which is good for Apple and consumers but not mobile carriers” posted Thursday:

Wireless carriers, eager to capitalize on the opportunity and avoid getting shown up by their rivals, are heaping on the promotions to both attract new customers and retain existing ones.

“If someone is willing to pay you $800 for a phone that’s worth $100, that’s a pretty good deal for a consumer and for Apple, but it will obviously impact the balance sheet for the wireless carrier,” LightShed Partners analyst Walter Piecyk told MarketWatch. The $800 subsidy is the largest he’s seen on an iPhone launch day…

Wireless deals of this nature typically only occur “late in an iPhone’s life cycle,” wrote Wolfe Research analyst Jeff Kvaal, who agreed that the carrier subsidies could help give iPhone 12 sales an early lift. The deals “may balance an uninspired 5G value proposition that Apple’s examples (mobile gaming, remote MRIs) did little to counter,” he continued.

My take: The carriers need Apple more than Apple needs them.

7 Comments

  1. Jerry Doyle said:
    “…. My take: The carriers need Apple more than Apple needs them.”

    Beautifully stated. I wish that I could similarly be so laconically descriptive.

    3
    October 15, 2020
  2. Gregg Thurman said:
    As a result of Marketwatch’s report I called Verizon rep. He didn’t anything special to offer as trade-in.

    Maybe those deals aren’t going to come out until launch.

    0
    October 15, 2020
    • Bart Yee said:
      @Gregg Per normal, the telecoms won’t do or offer anything unless you threaten to leave for the other guys. They always give their promotional rates to “new” subscribers and accounts or with new lines of service – never to existing subscribers; why should they reduce their own revenues from you? To help you save some money or get a newer phone?

      IME, that’s been their MO since Day 1 and with virtual monopolies in terms of geographical service (landlines or municipalities), they continue to act that way. In the case of wireless, like “The Outer Limits”, THEY control the coverage, they control the speeds, they control the data caps, and they manipulate the costs of plans. Like banks, everything is written to benefit themselves first and foremost. That is why “service and support” are always a distant second to them.

      2
      October 15, 2020
  3. Miguel Ancira said:
    One more reason why everybody should be long AAPL.

    3
    October 15, 2020
  4. David Emery said:
    $110 for an iPhone 8 with 256gb doesn’t sound like much incentive to me, ATT. (And ATT’s website failed to actually generate a price for a 12+/512gb, on both Safari and Firefox. I’ll be checking T-Mobile.)

    0
    October 15, 2020
    • Bart Yee said:
      @David
      Perusing the Apple Store app directly from your iPhone, for a new iPhone 12 Pro Max, 256gb model in graphite or pacific blue, you’d get a trade in of up to $140 for iPhone 8 in trade-in condition, up to $210 for an 8 Plus. You may be better off and get more by selling it privately as there are legions who still like the home buttton and TouchID. Takes a lot more work though for maybe 20-40% more return ($28-56).

      0
      October 15, 2020
    • Bart Yee said:
      Always check ebay completed sales for real values of what buyers are paying for working good condition iPhones. Asking prices on eBay and Craigslist tend to be, um, “optimistic”.

      0
      October 15, 2020

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