Will Apple’s New Prepaid Plan Options Boost In-Store iPhone Sales?
Apple (NASDAQ:AAPL) Stores in the U.S. will soon begin offering prepaid and month-to-month carrier plans for customers that purchase unsubsidized iPhones, according to an unnamed source cited by 9to5Mac.
Customers who currently choose to buy a full-price unlocked iPhone at the Apple Store either have to take the device to a carrier store in order to activate it, or bring their own previously activated SIM card with them. However, after the new program launches in the last week of June, unlocked iPhone customers will be able to activate their devices in-store with a prepaid plan.
According to 9to5Mac’s source, Apple is teaming up with AT&T (NYSE:T) and T-Mobile (NYSE:TMUS) for the new plan options. AT&T will offer a $60 per month prepaid plan with 2.5GB data and unlimited talk and text through its “GoPhone” activation kit. T-Mobile will offer two different options: a $50 per month 1GB plan and a $70 per month 5GB plan, via its prepaid SIM cards.
Although Apple has traditionally partnered with wireless carriers that subsidize the relatively high cost of an iPhone with a standard two-year service contract, contract-free smartphones have been steadily growing in popularity in the U.S. As a result, Apple has expanded the iPhone to several prepaid wireless service providers over the past year, including Straight Talk Wireless and NET10 Wireless.
However, the widespread availability of the iPhone has also contributed to a sales decline at Apple Stores. At an Apple Retail Store Leaders meeting in San Francisco last summer, CEO Tim Cook noted that about 80 percent of iPhone sales come from sources other than the Apple Stores, according to sources cited by 9to5Mac. On the other hand, 50 percent of iPhone repairs and replacements are done at Apple Store Genius Bars. At the meeting, Cook suggested that he would like to see those numbers more closely aligned. The upcoming prepaid and month-to-month iPhone plan options may give customers yet another reason to shop at the Apple Store instead of a carrier store.
Not only does Apple’s new initiative make it more convenient for unlocked iPhone buyers to activate their devices, it also increases the likelihood that those customers will buy other iDevices directly from Apple. A study completed by Consumer Intelligence Research Partners last year found that iPhone buyers who get their devices from Apple’s retail stores tend to purchase additional Apple products more often than shoppers who buy their iPhones at non-Apple retail outlets.
Apple is rumored to be launching two new iPhone models and a so-called iWatch this fall. The iPhone 6 is widely expected to be available in two larger screen sizes of 4.7 inches and 5.5 inches. The iWatch is believed to be a wrist-worn wearable tech device that will function as an accessory to the iPhone. According to insider sources cited by Japan’s Nikkei Asian Review, health-related data will be collected through the iWatch’s biometric sensors and relayed to health-monitoring apps on the iPhone. In this sense, Apple’s in-store iPhone sales may become even more crucial this year as the company introduces it first completely new product since the iPad in 2010.
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