Print 43 comment(s) - last by Mike Acker.. on Dec 11 at 7:39 AM

T-Mobile won't subsidize the cost of the iPhone

Deutsche Telekom announced yesterday that T-Mobile would begin selling Apple devices next year. T-Mobile CEO John Legere went on to confirm that the iPhone would be among the Apple products the wireless company will sell next year. However, he is warning that T-Mobile will offer the iPhone in a drastically different way than other carriers. T-Mobile is ending subsidies on all of its phones.

What that means is if you want the iPhone on the T-Mobile network, you'll pay for the entire purchase price of the phone upfront rather than getting a discount in exchange for signing up for a contract. T-Mobile is planning to shift to unsubsidized Value Plans offering customers cheaper rates for voice and data.

T-Mobile has already stated that 80% of the activations it had last quarter were customers choosing its new Value Plans. The plans are so successful that T-Mobile believes there's a huge demand for the pay up front and get a discounted plan sales model.
It remains to be seen if T-Mobile customers are willing to pay full price for the iPhone when other carriers are offering them a significant discounts.

Pricing for the iPhone ranges between $650 to $850 for unlocked devices. However, it appears that T-Mobile has a plan to help offset the huge upfront cost for expensive devices such as the iPhone 5. Legere has hinted that T-Mobile will sell the iPhone for $99 upfront and in charge subscribers $15 - $20 a month in payments over the following 20 months.

Source: Gigaom

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By Arsynic on 12/7/2012 9:28:18 AM , Rating: 3
$800 for an iPhone? Who believes that an iPhone really cost that. And some flip phones run $300 off contract. It's a racket.

I'd like to see our market become more like the European market where we just buy a phone and we go to whatever carrier. This is a step in the right direction but it's probably a few years off before we see any real change from the big players. Hopefully this catches on. Too bad T-Mobile's service sucks where I live.

By Gunbuster on 12/7/2012 9:48:56 AM , Rating: 3
How can any phone cost that much? You can pickup a windows phone 7 handset now for ~$150. For a just released phone somehow the bill of materials jumps 5X (iphone or windows phone 8 unsubsidized)

How can a phone cost double that of a cheap laptop? They are milking the smartphone boom for all it's worth!

By Dr of crap on 12/7/2012 1:05:58 PM , Rating: 2
They can charge whatever they want since they have you on thier network.

WHEN they HAVE to put out new phones every 6 months, you have to pay for R & D, marketing, ect... Now if people keep thier phones for 3-5 years ( like that'll happen ) and less new are bought the price will have to drop. AND competetion will force prices down, too.

By Sungpooz on 12/8/2012 3:01:22 AM , Rating: 2
You've gotta understand that there's more than cost of materials and labor that go into the phone. There's R&D and all the $$ they spend on marketing and the stupid lawsuits that go on between stubborn corporations- so there's a ton of reasons why the cost is so "high".

Maybe your definition of "high" is actually "I can't afford it".

By BigEdMan on 12/7/2012 9:52:29 AM , Rating: 2
Nice to know you T-Mobile. But it looks like I have to say goodbye soon. Bummer

By Rukkian on 12/10/2012 10:27:31 AM , Rating: 2
So what part of this makes you want to leave them? The fact that you save more than $20/month with an unsub phone, and then if you absolutely cannot afford a phone, you can get it financed for the same amount you are saving? And the plan is still cheapers than others.

I don't have T-Mobile due to coverage, but I would like to know your justification for while this would make you leave. Not trying to say you are wrong, just don't understand.

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