AT&T Mobility (NYSE:T) and Sprint (NYSE:S) are instigating an iPhone price war ahead of the holiday shopping season. Both operators are offering the 16 GB iPhone 5s for $100 to customers who purchase the phone online and agree to a two-year service contract.
The $100 price point for the 16 GB device is notable because it's rare for major operators to offer Apple's (NASDAQ:AAPL) latest iPhone at such a low price point. Verizon Wireless (NYSE:VZ) currently is selling the 16 GB iPhone 5s online for $200. According to AT&T spokesman Mark Siegel, the promotion is part of AT&T's seasonal smartphone strategy.
However, Sprint is also offering a discount on the 32 GB iPhone, selling it to new customers who port their number to Sprint for $199 online with a two-year contract and the 64 GB iPhone 5s for $299. AT&T and Verizon, meanwhile, are selling the 32 GB iPhone for $299 online and the 64 GB iPhone for $399.
T-Mobile (NYSE:TMUS) is also selling the iPhone 5s to its customers, but the company is offering the device in monthly installments. For example, T-Mobile is offering the iPhone 5s 16 GB for $149.99 upfront and a price of $20.83 per month for 24 months.
Roger Entner, an analyst with Recon Analytics and a frequent contributor to FierceWireless, said AT&T is discounting the iPhone 5s as a way to prompt more of its customers to convert to smartphones. In third quarter, the operator reported weakness in converting its feature phone base to smartphones.
In addition, both Sprint and AT&T are likely reacting to T-Mobile's third quarter growth in net adds, which is a result of the company's un-carrier strategy that includes no-contract plans, a handset upgrade program and an aggressive new style.
Entner noted that both AT&T and Sprint will likely see a hit to their margins in fourth quarter from these discounts.
- see this iMore blog post
- see this Howard Forums post
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