Yesterday’s introduction of the iPhone X has yet to produce an avalanche of promotions from carriers looking to claw market share away from their rivals. But that could change if a competitive holiday season turns into a feeding frenzy, according to analysts—and it could happen much earlier.
Then again, it might not.
As expected, Apple this week introduced a high-end, feature-heavy handset with a price tag to match. But the iPhone X won’t be available for preorders until Oct. 27, and the promotions that have been announced so far largely focus on the iPhone 8 and 8 Plus:
- AT&T is offering a 32 GB iPad for $100 on a two-year service agreement to customers who buy any of the new iPhone models through its AT&T Next program. And this morning the nation's No. stepped it up, reviving its BOGO program for buyers of a new iPhone 8 or 8 Plus, among other iPhones.
- T-Mobile will give a $300 trade-in discount on any new iPhone bought on an installment plan to users who hand over their iPhone 6 or newer in good condition. And the carrier is enabling users to sign up to be alerted about special offers and when preorders will be accepted.
- Sprint suggested it will unveil an iPhone X promotion today, but CEO Marcelo Claure guaranteed via Twitter that the carrier would have the sweetest deal in Apple's new phones.
- Verizon said it will unveil its promotions later this month, presumably giving it time to crunch the numbers.
- Xfinity Mobile will carry the iPhone 8 and 8 plus, but has yet to say whether it has plans to offer the iPhone X.
“The carrier deals that have emerged so far are unremarkable and largely in line with expectation,” said Geoff Blaber, vice president of research for the Americas at CCS Insight and FierceWireless contributor. “That said, T-Mobile’s trade-in deal of $300 is more aggressive and I’d expect others to eventually follow suit.”
Indeed, analysts have expected Apple’s new flagship phone to kickstart an ultra-competitive second half of 2017 as several impressive new handsets come to market. Samsung recently unveiled the Galaxy Note 8—which will contend with the iPhone X at the very high end of the market—and Sprint recently began taking preorders for the first phone from Andy Rubin’s Essential Products, for which it has exclusive selling rights. Meanwhile, Google is expected to throw some gasoline on the fire in the form of a second-generation Pixel.
Thus far, 2017 has been relatively quiet thus far on the wireless front. All major carriers have joined the unlimited-data game, which is largely why churn has been down significantly. But those new phones could serve as chum in the water for operators struggling in a saturated market.
“Most of the aggressive offers at launch will involve a trade-in and it won’t be until Black Friday or Christmas when another promotion will fall in,” wrote Christine Gallup, associate editor at WhistleOut, which produced a carrier pricing forecast for Apple’s new phones.
One early indicator regarding what to expect in the fourth quarter could be T-Mobile’s strategy with the iPhone X, according to Cliff Maldonado of BayStreet Research. If the nation’s third-largest carrier makes a bold move it may force rivals to follow. But BayStreet doesn’t expect this holiday season to be as competitive as last year’s.
“We are watching T-Mobile’s offer the closest as they tend to set the pace for the other national carriers,” Maldonado said via email. “Given last year’s promotions offered ~$650 value with iPhone 6 or higher trade-in, our initial view thus far is that promotions are weaker than expected. However, carriers have not finalized initial promotions. Our 4Q17 forecast assumed slightly weaker promotions year over year at ~$500 with trade-in.”
Then again, the iPhone X may be such an elite handset that typical pricing models and marketing strategies don’t really apply, suggested Wayne Lam, principal analyst of mobile devices and networks for IHS Markit. Customers looking to upgrade to the new phone are less likely to be swayed by cut-rate deals than those who might switch to a less expensive device, and operators won’t want to take a hit on the bottom line to undercut the competition’s iPhone X price just to grab market share.
“I don’t see carriers willing to take a lower margin and go back to subsidizing hardware; it wouldn’t make sense from an economic perspective,” Lam told FierceWireless. “I think if we’re looking at price we’re missing what the iPhone X represents. This is a phone that’’s not supposed to be here now; it’s supposed to be here a couple years from now ... Apple is creating kind of an aspirational product here.”