Apple Inc. got to where it is today by making savvy deals with carriers in the United States. Ever since the release of the first iPhone, the firm has managed to convince the massive wireless firms to take what it is offering without much question. With the release of the iPhone 6S, that pressure has become almost too much to bear.
This time around Apple has not only put carriers in a position where loaning a customer a phone in exchange for a monthly payout is the only option. In 2015 Apple is going to compete with those carriers itself. The firm is offering a jailbroken iPhone 6S for a monthly fee, and carriers are trying to compete with the plan on price.
Apple Inc. drives iPhone prices down
Apple Inc. is, it seems, trying to restrict the profit that those who offer wireless service can make from selling smart phones. On Wednesday T-Mobile revealed a new deal where subscribers, should they trade in a last-gen smartphone, will be able to get their hands on an iPhone 6S for just $5 per month.
The T-Mobile deal is simple. If a user trades in an iPhone 6, iPhone 6 Plus, Samsung Galaxy S6, or Samsung Galaxy Note 5, they can have an iPhone 6S with 16GB of memory for just $5 per month. An iPhone 6S Plus can be had for $9 under the plan.
The low price, and massive compromise, that the T-Mobile deal represents shows the competition that wireless firms in the US are facing on iPhone prices. Demand for the most notable smart phone in the world keeps getting higher, and competition for sales keeps getting hotter.
T-Mobile is taking the lead on price this time around. The $5 per month trade in price compares well with the next cheapest plan from Sprint. That firm offers the device at $15 per month with a 22 month contract.
Apple Inc. starts to hurt carriers
Apple Inc. has been causing trouble for carriers for quite some time, but the firm’s smart phone is so popular that there’s little those selling wireless service can do about the its market power. People who use a great smart phone like the iPhone are more likely to use data on it. That’s where those firms make their money.
Dan Frommer, over at Quartz, in a piece written right after Apple revealed its new plan to compete with carriers, said that the “change in power has dramatically improved the customer experience. But it has also translated into popularity and profits for Apple—and a real value shift over the past decade.”
Apple is continuing that shift, and with iPhone sales set to be over 200 million for the second year in a row there’s little that those selling data contracts can do about it.