Apple to retain iPhone 3GS model, push units towards developing markets

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Date: Monday, May 21st, 2012, 14:45
Category: iPhone, News

It may not be the fastest, most recent or snazziest iPhone, but Apple will keep the 3GS around for a bit longer.

Per AppleInsider, analyst Peter Misek with Jefferies has received word that Apple has inked an agreement with “a leading distribution and logistics company.” That new partnership is intended to push the iPhone 3GS in prepaid markets around the world, and expand channels for the iPhone 3GS in developing countries.

Accordingly, Misek believes that Apple is in the process of repricing the iPhone 3GS, which currently costs US$375 without a contract. He expects that the third-generation iPhone will be priced between US$250 and US$300, which would allow someone to buy it with no subsidy for around the cost of an on-contract iPhone 4S.

The iPhone 3GS can currently be had for free with a new two-year service contract in major markets like the U.S. It serves as Apple’s entry-level smartphone, while the iPhone 4, first released in 2010, is available for US$99 with a carrier subsidy.

Apple is expected to launch its new sixth-generation iPhone this fall. If the company were to continue its current strategy of discounting previous-generation hardware, the iPhone 4S lineup would be reduced to one capacity for US$99, while the iPhone 4 would become free with a two-year contract.

With the iPhone 4 replacing the iPhone 3GS as Apple’s entry-level smartphone, some might expect that the iPhone 3GS would be an end-of-life product. But based on what Misek has heard, Apple may have other plans to expand iPhone sales in markets where Apple has yet made a significant impact.

“Emerging markets” have been identified as a potential source of a huge number of untapped customers that present a long-term upside for Apple. One analysis conducted earlier this year found that emerging markets have 14 times as many people between the smartphone friendly ages of 25 and 34 than Western Europe and North America.

One report published earlier this year by The Wall Street Journal declared that cheap Android-based smartphones were “crushing the iPhone” in European countries that have been hit hardest by the debt crisis. In those markets, most consumers don’t sign contracts and pay the full, unsubsidized price for smartphones.

Apple Chief Executive Tim Cook said last October that the prepaid market is “very, very important” to his company. He said that was one of the reasons the company continues to sell its entry-level iPhone 3GS, to reach lower price points in both prepaid and postpaid markets.

Stay tuned for additional details as they become available.

Sprint now offering $100 trade-in credit for iPhones from competing carriers

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Date: Monday, May 21st, 2012, 06:55
Category: iPhone, News

It never hurts to offer an incentive.

In an effort to drum up subscribership and advertise its unlimited data plan for the iPhone 4S, Sprint revealed on Friday that it will begin offering a US$100 credit to any customer who trades in an iPhone from another carrier.

Per AppleInsider, the carrier said that it would be offering non-Sprint users at least US$100 for their iPhone to be used towards a new iPhone 4S if they start a line of service with a minimum two-year contract.

Sprint’s announcement comes on the heels of reports earlier this week that revealed Verizon would be pushing to end unlimited data usage for its smartphone users come this summer when the company rolls out new shared data plans. The top U.S. wireless company issued a statement on Thursday clarifying that only subscribers upgrading to a subsidized handset would no longer be able to take advantage of the all-you-can-eat service.

Both Verizon and AT&T have come under fire for slowly squeezing grandfathered customers out of their unlimited plans, represented by Verizon’s upgrade policy and AT&T’s March decision to throttle heavy data users after they pass a 3GB per month threshold.

When it became the last of the big-three telecoms to offer the iPhone, Sprint announced plans to offer unlimited data to new customers when the top two wireless providers killed off their respective uncapped services in a move toward more profitable tiered solutions. AT&T was the first to axe unlimited iPhone data in June 2010, and recently CEO Randall Stephenson admitted that he wished the company had never offered the option. Verizon followed AT&T’s lead in July 2011, a mere six months after the device launched on its network.

In a move to stand out from the competition, Sprint CEO Dan Hesse announced in April that his company will continue to offer unlimited data for the next generation iPhone sight-unseen, which means that users can utilize uncapped bandwidth even if the handset supports 4G LTE.

Earlier this week Hesse said that Sprint wouldn’t make a profit from the iPhone until 2015, but has no regreets in making a bet-the-company move to ink an agreement to sell the handset that was later revealed to be worth US$15.5 billion over the next four years.

“We believe in the long term,” Hesse said. “And over time we will make more money on iPhone customers than we will on other customers.”

To take advantage of the offer, interested parties must activate a new line by July 3 and trade-in their non-Sprint iPhone before Aug. 14.

Stay tuned for additional details as they become available.