Why wireless carriers can offer iPhone 14s for free

Why wireless carriers can offer iPhone 14s for free



CNN Business

The Disclosure of the latest iPhone 14 lineup Earlier this week, it did spur a flurry of new promotions from wireless giants including AT&T, T-Mobile, and Verizon.

The three big US carriers have announced deals that allow eligible customers to get Apple’s latest smartphone for free, under certain conditions, which often includes trading in an older iPhone model. For example, AT&T and T-Mobile are both offering up to $1,000 in credits, after trade-ins, for the purchase of an iPhone 14 or iPhone 14 Pro. Verizon is offering up to $800 in credit after you trade in an iPhone 14 or iPhone 14 Pro, per some deals that have been rounded up and promoted. apple.

While Apple has managed to keep the base price of the latest iPhone the same as the previous generation, the iPhone 14 still starts at a whopping $799 and $899 for the 14 Plus model. Meanwhile, the top-of-the-line 14 Pro starts at $999 and the 14 Pro Max at $1,099. At a time when inflation is squeezing consumers on all sides, deals from carriers can help make the latest iPhone more affordable.

Wireless carriers that have built extensive 5G infrastructure may also offer these huge discounts as they seek customers to upgrade to 5G-enabled devices, according to Tom Forte, senior research analyst at DA Davidson. “They’ve invested billions of dollars in their 5G networks and are trying to get a return on their investment,” Forte told CNN Business.

The iPhone has been capable of using 5G networks since the iPhone 12 was released in 2020.

“Another reason, though, I think they’re able to do this is because iPhones historically hold their values ​​so well,” he added, noting that many offers include trading in an older iPhone model to qualify for rebates or free of charge on newer devices. Many of these companies then sell pre-owned and refurbished iPhones.

The latest iPhone 14 lineup, in the US at least, has it Also gave up the SIM card tray And the eSIM is completely gone. By doing this, Forte said, “Apple is essentially making it easier for consumers to switch services.” “This could be another reason for carriers to be more aggressive, or at least as aggressive as they were 12 years ago, to get consumers to sign up.”

However, it’s important to read the fine print, as these deals often come in the form of contracts, which has been a common practice since cell phones became so ubiquitous. Forte noted that if you were to take advantage of some of these iPhone 14 promotions but then try to cancel the service after a month or two, you would likely be responsible for “much more than the purchase price” of the new phone.

Apple and carriers may also benefit from the increased popularity of buy-now-pay-later plans among consumers in recent years, according to Julie Ask, vice president and principal analyst at Forrester. Therefore, more people looking for options to pay for a new iPhone over time may be especially drawn to carrier deals that expire including device discounts and cellular plans, even if they have a longer commitment.

“There has been a slight uptick in consumers’ willingness and interest to pay over time,” she told CNN Business. However, she said carriers often look to “lock people up for at least two years, so that’s the fine print I’ll be looking for.”

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