It’s new iPhone season, and it turns out that this year’s iPhone craze is kicking off new levels of competition among wireless carriers. That’s particularly evident in the escalating price war between Sprint and T-Mobile, which are falling all over themselves to offer the new iPhone 6s at rock-bottom monthly prices in order to lure customers away from larger competitors AT&T and Verizon. Luckily, the ensuing price war is something you can take advantage of if you’re in the market for the best deal on a new iPhone 6s or iPhone 6s Plus.
Dawn Chmielewski and Ina Fried report for Re/code that T-Mobile recently announced it would offer the new iPhone 6s starting at just $5 per month through its Jump on Demand leasing program. To get the $5 per month offer, customers need to trade in an iPhone 6 or iPhone 6 Plus. The price of the program goes up when the customer exchanges an older device and costs $10 per month, for instance, for those trading in an iPhone 5s or a Samsung Galaxy Note 4.
The company’s press release promoted the offer as “unmatched in the industry,” and quoted chief executive John Legere as stating, “this is a deal that only the Un-carrier could create, let alone make into a reality.” But the deal didn’t go unanswered by Sprint, which is offering the new iPhone 6s for as little as $1 per month through its iPhone Forever leasing program with the trade-in of an iPhone 6. (For customers trading in the older iPhone 5s, the cost goes up to $10 per month.)
Under the headline “Not So Fast T-Mobile,” Sprint announced that it would offer the iPhone 6s 16GB for $1 per month and the iPhone 6s Plus for $5 per month with the trade-in of an iPhone 6. Models with more storage are “also value-priced at $5.77/month for the 64GB and $10.53 for the 128GB with the trade in of an iPhone 6. For the 6s Plus, higher memory configurations cost $9.77/month for the 64GB and $14.53 for the 128GB with an iPhone 6 trade–in.” The Wall Street Journal reports that Sprint had not planned to offer the promotion until it saw T-Mobile’s. About 10 employees worked an all-nighter to ready the details of the $1 leasing plan after seeing T-Mobile’s offer.
Under both Sprint’s and T-Mobile’s plans, you don’t actually own your iPhone. In fact, Sprint chief executive Marcelo Claure told USA Today that “There’s no need to ‘own’ an iPhone” anymore. Both companies hope that you’ll continue trading in your iPhone to get a new one as Apple unveils them. But here’s where things get interesting: What happens if you want to keep and pay off your iPhone 6s instead of upgrading to whatever model — the iPhone 7? — comes next. T-Mobile has an intriguing answer. The company’s press release on its latest promotion explains:
If you want to hang on to your iPhone after your 18 month JUMP! On Demand agreement is up, you can at T-Mobile for $125 LESS than the full retail price. That’s just $524 for a new iPhone 6s 16GB without trade in. And with iPhone 6 trade in, you can keep your iPhone 6s 16GB after 18 months, after paying just $254 in total – that’s $395 less than full retail price with trade in. In fact, T-Mobile is the only provider offering iPhone 6s and iPhone 6s Plus at a discounted price.
That makes T-Mobile’s plan a great option for consumers who want a new iPhone now, but don’t foresee themselves upgrading to a new iPhone each time Apple introduces a new one. In any case, figuring out which is the best plan for you will depend on what phone you have to trade in, which configuration of the new iPhone 6s you want, and how often you really want to upgrade to a new iPhone. But bear in mind that these promotions are designed to get you on a plan where you get automatic upgrades, which effectively locks you in with a carrier despite the absence of a contract, which is the only way that such offers make sense for carriers.
Both carriers are battling for subscribers, and Sprint recently slid to fourth place among major U.S. carriers. iPhone customers often number among the most lucrative customers of all, and carriers are looking to lock in iPhone fans who are willing to switch carriers to get the best deal on a new iPhone. BTIG telecom analyst Walter Piecyk, referring to carriers’ past practice of subsidizing the cost of a phone with two-year contracts, told Re/code, “It didn’t take long for an industry trumpeting the lack of subsidies in phone payment plans to dive back in with even larger subsidies than before.”
AT&T and Verizon, which are the largest carriers in the United States, have been much less aggressive in their promotions. The Wall Street Journal’s Ryan Knutson notes that neither carrier leases phones, though each offers an installment plan. For the iPhone 6s, Verizon is offering up to $400 if a customer switches carriers and trades in an old phone, and AT&T is offering up to $300.