Let the iPhone 13 price wars begin. With the debut of Apple Inc’s newest phones, AT&T Inc embarked on a second year of giveaways, offering the new iPhone 13 Pro free to new and existing customers who have qualifying trade-ins and unlimited data plans, a deal worth as much as $1,000. T-Mobile US Inc is matching the iPhone 13 Pro credit, while Verizon Communications Inc is offering up to $800.
Data-plan price wars used to be the main front in wireless competition. But they have faded into history, replaced by phone discounts and giveaways. AT&T has been the most aggressive, with a standing offer to give free or deeply discounted phones to all of its customers on unlimited plans.
With all three carriers, subscribers who sign on for the deals will see a monthly charge for the phones and an offsetting credit. Additional storage capacity will cost extra, according to an Apple price page that lists all three carriers’ promotions.
The iPhone 13 Pro has a retail price starting at $999, a cost that Dallas-based AT&T is more than willing to absorb to fuel subscriber growth. That’s become the carrier’s top priority since it decided to ditch its WarnerMedia entertainment operations and return to its roots as a phone company focused on wireless and broadband service.
T-Mobile, based in Bellevue, Washington, has followed along at times in a fight to keep market share, while New York-based Verizon has sparingly used free phones and steep discounts through limited-time offers.
The giveaways have had a direct impact on subscriber growth. Last quarter, AT&T was the top gainer in mobile phone subscribers, adding 789,000 customers in the second quarter, exceeding the 627,000 gained by perennial growth leader T-Mobile. Verizon, the No. 1 US wireless carrier, had the smallest gains.
“The industry has always been competitive,” T-Mobile Chief Financial Officer Peter Osvaldik said at a Bank of America Corp. investor conference. “We’ve proven we can compete and grow profitably.”
Growth isn’t cheap. The cost of giving away phones is spread out, usually over many month period. But it cuts into the average revenue per user, or ARPU, a key measure of financial performance for wireless companies.
Cost to Carriers
Handset sales have been on an upswing for the past year, fuelled by attractive prices, the arrival of a new generation of 5G phones and consumer reengagement after more than a year and a half of the pandemic, Verizon consumer chief Ronan Dunne said at a presentation for the same bank.
Store and online sales are up “very significantly,” because people have money in the bank, Dunne said. “Probably 70% of households in the US probably have higher savings today than they did 12 months ago,” he said.
Apple adds larger screens to new watch shipping
Apple Inc unveiled an upgraded Apple Watch, adding larger displays, new watch faces and an updated user interface, but didn’t provide a specific release date. The company showed off the smartwatches at a media event focused on new products. The new version, known as the Apple Watch Series 7, marks the first time the company has enlarged the watch display since the Series 4 three years ago. The new model won’t launch until “later this fall,” Apple said, likely due to previously reported production delays.
The watch has become an increasingly important part of Apple’s portfolio. Though the product got off to a slow start half a decade ago, it has now essentially become the smartwatch industry itself, surpassing an estimated 100 million in lifetime unit sales earlier this year. In the third fiscal quarter, Apple’s wearables and accessories division, driven primarily by the Apple Watch, generated $8.8 billion in revenue.
The new screens are 20% larger than on the Apple Watch Series 6, Apple Chief Operating Officer Jeff Williams said. The borders around display are also 40% thinner, he said. The design itself is similar to previous versions, including rounded edges. The new screen is 70% brighter and more crack-resistant, Apple said.
To take advantage of larger screen area, Apple showed multiple new watch faces, including one that can show two large complications — the industry term for snippets of data like weather, calendar appointments or health information — instead of one at a time like on the previous versions. It also showed new Contour and World Time faces.
Apple has also upgraded charging, saying the device will now juice up 33% faster with a new USB-C driven charger.
Bloomberg News reported on the new display and features earlier this year. The company is planning more updates for next year, including a new flagship version with a thermometer, an update to the lower-end Apple Watch SE, and a new edition with a rugged case geared toward extreme sports athletes, Bloomberg has reported.