Why wireless carriers can give iPhone 14s for free

CNN Business
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The Unveiling the latest iPhone 14 lineup Earlier this week, it already spurred a flurry of new promotions from wireless giants including AT&T, T-Mobile and Verizon.

The Big Three 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 are offering up to $1,000 in credits, after swaps, for an iPhone 14 or iPhone 14 Pro. Verizon is offering up to $800 credit after you trade in your iPhone 14 or iPhone 14 Pro, for all some of the rounded up and promoted offers apple.

While Apple has managed to keep the base price of the latest iPhone as it was for the previous generation, the iPhone 14 still starts at a whopping $799 and $899 for the 14 Plus model. Meanwhile, the higher-end 14 Pro model starts at $999 and the 14 Pro Max at $1,099. At a time when inflation is stressing consumers on all sides, deals from carriers can help make the latest iPhone more affordable.

Wireless carriers that have built extensive 5G infrastructure may offer these massive discounts as they seek to upgrade customers to 5G-enabled devices, according to Tom Forte, senior research analyst at DA Davidson. “They have invested billions of dollars in their 5G networks and are 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 was released in 2020.

“The other reason, though, that I think they’re able to do this is because iPhones have historically held their values ​​so well,” he added, noting that many offers include trading in an older iPhone model to qualify for discounts or free of charge on the latest hardware. Many of these companies then sell pre-owned and refurbished iPhones.

The latest iPhone 14 lineup, in the US at least, has Also give up the SIM card tray And the eSIM is completely gone. By doing so, Forte said, “Apple is essentially making it easier for consumers to switch services.” “This may be another reason why carriers are more aggressive, or at least as aggressive as they were 12 years ago, to get consumers to sign up.”

However, it is important to read the finer details, as these deals often come in the form of contracts, a common practice since cell phones have become so ubiquitous. Forte noted that if you’re going to take advantage of some iPhone 14 promotions but then try to cancel service after a month or two, you’ll likely be responsible for “much more than the purchase price” of the new phone.

Apple and carriers may also benefit from the increasing popularity of buy now and pay later plans among consumers in recent years, according to Julie Ask, vice president and principal analyst at Forrester. Therefore, more people looking for options to pay for a new iPhone over time may be particularly drawn to carrier deals that expire including discounts on the device and cellular plans, even if they have a longer commitment.

“There has been a slight increase in consumers’ willingness and interest in paying over time,” she told CNN Business. Still, she said, carriers often look to “lock people in for at least two years, so that’s the fine print I’ll be looking for.”