T-Mobile US (NYSE:TMUS) confirmed that customers who choose its new "Simple Choice" no-contract plans will need to pay $149.99 up front for Apple's (NASDAQ:AAPL) iPhone 5, up from $99.99 previously. The $99.99 price was apparently only a promotional price for the first month of T-Mobile's iPhone sales, though the carrier did not indicate that when it announced in late March it was launching the iPhone.
The pricing change, first spotted by the website TMoNews, comes as T-Mobile is trying to rebrand itself as the "uncarrier," breaking free from many of the practices that have characterized the operations of Tier 1 U.S. carriers. While price changes for devices are fairly common, what sets the iPhone 5 price change apart is that T-Mobile made no mention of the promotional pricing before.
BTIG analyst Walter Piecyk warned of such a move last month, noting the difference between "full price" of T-Mobile's iPhone 5 ($579) and Apple's own full price on its website ($649). "The difference is a promotional subsidy within T-Mobile's new strategy," Piecyk wrote at the time.
"As America's Un-carrier, T-Mobile is committed to introducing the hottest new smartphones at unbeatable promotional prices--but we all know promotions are temporary," the company said in a statement to FierceWireless. "The great news here is that well-qualified customers, on approved credit, can still buy iPhone 5 from T-Mobile for $149.99 down starting Monday, May 13. That's easily the most affordable iPhone 5 price on the market today. Alternatively, customers can also bring in their old iPhone 4S or iPhone 4 through Father's Day (June 16) and get an iPhone 5 for $0 down plus monthly payments through our special device trade-in offer."
Under the new pricing, customers with good credit can pay $149.99 up front for the 16 GB iPhone 5 and then 24 monthly payments of $20, for a total cost of $630. Customers can also purchase the phone for the full cost outright.
T-Mobile declined to comment on why the pricing change was being made or why it did not clarify earlier that the $99.99 upfront cost for the iPhone 5 was a promotional price point. "T-Mobile is continuing to deliver on our Un-carrier commitment by giving customers affordable access to the best devices," the company said. "While specific price points may fluctuate, our goal is to provide the lowest, upfront price on the latest devices for our customers."
T-Mobile on May 8 said that, since it started selling the iPhone 5 nationwide April 12, it has sold 500,000 units of the device, an indication of pent-up demand for the gadget at the carrier. The company has also been selling the iPhone 4S and 4 in select markets.
Under T-Mobile's Simple Choice" plans customers can either buy their smartphone outright for the full cost of the device or they can make a down payment and then pay for the remainder of the cost of the device in monthly installments. Additionally, customers can bring unlocked devices to T-Mobile. However, some customers, consumer advocates and others have criticized the plans, arguing that because T-Mobile customers still make monthly device payments under the plans, those payments are essentially a form of a contract.
- see this TMoNews article
- see this The Verge article
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