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Why was T-Mobile USA finally able to reach an iPhone deal? Because it's ending phone subsidies...

  • Thursday, December 6, 2012, 4:25 PM ET
    Why was T-Mobile USA finally able to reach an iPhone deal? Because it's ending phone subsidies next year. In a radical move, the struggling low-end carrier says all phones it sells will soon have to be paid for in full, up-front or via installments. With the iPhone 5 (AAPL) selling for $649-$849 unsubsidized, its sales stand to be disproportionately affected. T-Mobile's move will hurt business with customers who demand high-end hardware for $200 or less, but will also allow it to shift entirely to its cheap Value Plans.
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    As a consumer, I welcome the move to sell phones at unsubsidized price. Every time when there is subsidy, the real price gets distorted. Think for example, if a nice computer can sell for $500 or less, why should a smart phone, nothing but a small and slow version of a computer sell for more? Look at what is happening to the tablet market with no subsidy from anyone? Perhaps a good time to short Apple (when combining other news such as Baidu will introduce a much cheaper smartphone etc.)
    7 Dec 2012, 09:15 AM Reply Like
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