![\"\"](\"http:\/\/betanews.com\/wp-content\/uploads\/2013\/04\/iPhone-marketing-material-600x450.jpg\" "\\"iPhone")
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Last night, I rushed off to the local mall intent on seeing movie “Oblivion”, but the 6:45 p.m. show was sold out. So I walked around and spent time inside Apple and Microsoft retail shops. At Apple Store, I had two objectives: finding out the cost of replacing a shattered iPhone 5 screen (not available, refurb phone is $229 option) and observing how the company sells T-Mobile models alongside those from AT&T, Sprint and Verizon. Pink’s unlocked phone costs less upfront compared to Blue, Red and Yellow and is financed for 24 months. Apple presents T-Mobile iPhone 5 as costing considerably more.<\/p>\n
Apple Store provides product information on iPads<\/a>, which is a subtle way of promoting the devices. The marketing page presents 16GB iPhone 5 as selling “from $199” for AT&T, Sprint and Verizon and “from $649” for T-Mobile, which is technically true but also misleading. The $199 represents the big three’s upfront price. T-Mobile asks about half as much, $99.99, upfront. But Apple lists T-Mobile’s price as $450 more. Who wants to pay $649 when the others charge $199? <\/p>\n By not showing consumers the real upfront price, Apple presents T-Mobile pricing unfairly by the metric most consumers care about — what does the thing cost me now<\/i>. The big three’s pricing requires 2-year contract, T-Mobile’s 24 $20 monthly payments.<\/p>\n The time period of consumer commitment, whether contract or monthly payments, is effectively the same to the consumer. For example, AT&T charges a $325 early termination fee, which amount goes down monthly (ETF divided by 24). T-Mobile interest-free financing is similar, in that the amount owed on the phone decreases every month of payment.<\/p>\n By the way, Apple’s no-contract price is more than what T-Mobile charges ($579.99, whether all at once or over 24 months). Apple offers financing, too, through Barclaycard with approved credit. So purchasing option for “from $99.99” is available from Apple, but there’s no distinction made in the in-store marketing material most buyers casually see.<\/p>\n The question to ask: Why<\/i> doesn’t Apple present T-Mobile’s upfront price in the same manner as the other carriers? It’s easy to put: “iPhone from $99.99”, which is as accurate as “iPhone from $649”. Today, an Apple Store employee told me that the presentation is what T-Mobile wants because of financing and that Pink prefers to sell the phones directly, something I can’t independently confirm on a Sunday. Apple’s financing option isn’t interest-free, unlike T-Mobile’s, which could explain why the carrier might prefer to sell direct.<\/p>\n Certainly, T-Mobile’s no-contract approach is mitigating factor. Last month, the carrier adopted new plan pricing that is considerably less than Blue, Red and Yellow. Additionally, T-Mobile started selling phones without subsidies, which is where the lower upfront pricing with monthly payments comes in.<\/p>\n Subsidies are hugely lucrative for Apple and hide devices’ real cost to buyers. That $199 Jane Consumer pays for 16GB iPhone 5 isn’t the phone’s real cost, which is $649 to the carriers. They recover the subsidy by locking buyers into 2-year contracts and making data plans required. For example, 20 bucks a month on AT&T for puny 300MB. How funny. Apple marketing uses the unsubsidized pricing to whack-a-mole T-Mobile.<\/p>\n Apple has no obligation to help T-Mobile sell phones, and no incentive either if Pink pays for inventory up front (which is logical presumption). If the one store clerk is correct, then Apple merely follows T-Mobile’s wishes. <\/p>\n Bottom line: Regardless of why<\/i> the presentation, there is direct benefit to the big three carriers, which are more important customers to Apple than T-Mobile. They move more volume and surely wouldn’t want Pink “from $99.99” alongside their “from $199” pricing. Upfront does matter<\/i> to many potential buyers. If T-Mobile holds on to more customers and churns more from competitors, other carriers lose money. “From $649” puts Pink in the negative, rather than the positive.<\/p>\n Perhaps T-Mobile really wants Apple to sell iPhone 5 this way in its stores. I can’t yet say. But I know this: As a buyer comparing prices inside Apple Store, T-Mobile’s iPhone 5 appears to cost considerably more than what Blue, Red or Yellow charge.<\/p>\n Photo Credit:<\/strong> Joe Wilcox<\/p>\n Last night, I rushed off to the local mall intent on seeing movie “Oblivion”, but the 6:45 p.m. show was sold out. So I walked around and spent time inside Apple and Microsoft retail shops. At Apple Store, I had two objectives: finding out the cost of replacing a shattered iPhone 5 screen (not available, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-653582","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/653582","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=653582"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/653582\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=653582"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=653582"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=653582"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n<\/img><\/a>
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