To make that happen, Apple may need to share in the cost of subsidizing devices. Without naming Apple directly, Sprint Chief Executive Marcelo Claure made that point at a Goldman Sachs conference on Thursday.
Sprint does not have any plans to offer the high-end, iPhone X for free, Claure said. Apple’s iPhone X starts at $999 for a 64-gigabyte version. Even with a promotion, Sprint would look for customers to put some money down as part of an installment plan, he said.
If other smartphone makers follow Apple’s lead and roll out higher-priced devices, they may also need to share in subsidizing the retail price, says Claure.
“We are still not set in terms of financing an expensive device, the way it has been,” Claure said. “I think we should invite the manufacturers to share a little of the cash flow burden that comes with — as the price of devices goes higher. So we still haven’t made a decision, whether we are just going to offer — finance $1,000.”
“We obviously want to see what happens in a competitive landscape,” Claure added. “But we are not too excited with the prices going up, and also having to finance that.”
Apple did not respond to an email asking if it’s willing to share in iPhone financing costs. The iPhone 8 and 8 Plus start at $699 and $799 — $50 higher than the entry-level iPhone 7 pricing a year ago. The iPhone X will not ship until Nov. 3, so early promotions may focus on the iPhone 8 and 8 Plus.
Sprint currently offers 50% off an iPhone 8 leasing plan.
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T-Mobile intensified wireless wars last year by launching a “free” iPhone 7 promotion with the trade-in of an older device. Sprint, AT&T and Verizon responded with similar offers.
This year, the company is giving $300 dollars of credit on the iPhone 8 and 8 Plus to new switchers along with an option to upgrade to the next year’s new iPhone for free.
T-Mobile CFO Braxton Carter, also speaking at the Goldman conference, said its free iPhone strategy in 2016 didn’t work “because everyone copied us in a few days.”
“Free iPhones weren’t a great way to get people to switch,” Braxton said.
While AT&T has announced a “buy one, get one free” promotion for the iPhone 8 that started today, Wall Street analysts say wireless firms are not offering promotions as aggressive as with the iPhone 7.
“Investors are apt to look favorably on the rational behavior, which could soften the margin impact of this upgrade cycle,” said Mike McCormack, a Jefferies analyst in a report.
Apple stock gained 1.4% to 160.57 in the stock market today.
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