Why can wireless carriers give away iPhone 14s for free?

Why can wireless carriers give away iPhone 14s for free?
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All three major US carriers have announced deals that allow eligible customers to get the latest Apple smartphone for free under certain conditions, which often include trading in an older iPhone model. For example, AT&T and T-Mobile both offer up to $1,000 in credit with the purchase of an iPhone 14 or iPhone 14 Pro. Verizon is offering up to $800 in credit toward the iPhone 14 or iPhone 14 Pro. apple.

Although Apple has managed to keep the base price for the latest iPhone the same as for the previous generation, the iPhone 14 still starts at $799 and the 14 Plus model at $899. Meanwhile, the high-end 14 Pro model starts at $999, while the 14 Pro Max starts at $1,099. With inflation squeezing consumers from all sides, carrier deals could help make the latest iPhone more affordable.

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

The iPhone has been able to use 5G networks since the iPhone 12 released in 2020.

“Another reason I think they’re able to do this is because iPhones have historically held their value well,” he said, adding that most of the offers involved trading in an older iPhone model. discounts or freebies on the latest devices. Many of these carriers then sell used and refurbished iPhones.

The latest iPhone 14 lineup is here, at least in the US He also dropped the SIM card tray and eSIM is completely gone. By doing so, Apple is “making it easier for consumers to switch services,” Strong said. “That may be another reason why carriers are more aggressive, or at least as aggressive as they have been since 12, to get consumers signed up.”

Still, it’s important to read the fine print, these deals often come in the form of contracts, a common practice since cell phones became ubiquitous. Strong noted that if you take advantage of some of these iPhone 14 promotions but try to cancel service after a month or two, you’ll be responsible for “more than the purchase price” of the new phone.

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According to Forrester vice president and senior analyst Julie Ask, Apple and carriers could benefit from the rise in popularity of buy-now-pay-later plans among consumers in recent years. So, over time, more people looking for payment options for a new iPhone may eventually be drawn to carrier deals, including discounts on devices and cellular plans, even if they have a longer commitment.

“There has been some uptick in consumer interest and willingness to pay over time,” he told CNN Business. Still, he said carriers often “want to lock people up for at least a couple of years, so that’s the fine print I’ll be looking for.”

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