Why mobile carriers can give out iPhone 14s for free

Why mobile carriers can give out iPhone 14s for free
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All three major US carriers have announced deals that allow eligible customers to get the latest Apple smartphone for free, subject to certain conditions, which often involve trading in an older iPhone model. AT&T and T-Mobile, for example, both offer up to $1,000 in trade-in credit for the purchase of the iPhone 14 or iPhone 14 Pro. Verizon is offering up to $800 in credit after an iPhone 14 or iPhone 14 Pro trade-in, per some of the deals rounded up and advertised Apple.

While Apple has managed to keep the base price for the latest iPhone the same as the previous generation, the iPhone 14 still starts at a whopping $799 and $899 for the 14 Plus model. Meanwhile, the high-end 14 Pro model starts at $999 and the 14 Pro Max at $1,099. At a time when consumers are under pressure from all sides, carrier deals can help make the latest iPhone more affordable.

According to Tom Forte, senior research analyst at DA Davidson, wireless carriers that have built extensive 5G infrastructure may also be offering these hefty discounts when seeking customers to upgrade to 5G-enabled devices. “They have billions of dollars invested in their own 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, which was released in 2020.

“The other reason, but I think they’re able to do that, is because the iPhones have historically held their value well,” he added, noting that many of the deals involve trading an older iPhone model around to qualify for the discounts or freebies on the latest devices. Many of these providers then sell used and refurbished iPhones.

The latest iPhone 14 range, at least in the US, has The SIM card tray has also been removed and gone completely eSIM. By doing this, Apple “essentially makes it easier for consumers to switch service,” Forte said. “That could be another reason airlines are more aggressive, or at least as aggressive as they have been since the 12th, to get consumers to sign up.”

Still, it’s important to read the fine print, as these deals are often in the form of contracts, a practice that’s been common since cell phones became ubiquitous. Forte noted that if you take advantage of some of these iPhone 14 promotions but then try to cancel the service after a month or two, you’re likely responsible for “much more than the purchase price” of the new phone.

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According to Julie Ask, vice president and chief analyst at Forrester, Apple and carriers could also benefit from the rise in popularity of buy-it-now, pay-later plans among consumers in recent years. Therefore, more people looking for options to pay for a new iPhone over time could be particularly attracted to carrier offers that ultimately include discounts on the device and cellular plans, even if they make a longer commitment.

“Consumer willingness to pay and interest has increased somewhat over time,” she told CNN Business. Still, she said transport companies often try to lock people up for at least a couple of years, so that’s the fine print I would look for.

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