Hatters beware. On September 9th, Apple is going to announce the new iPhone 6s–expect a better camera, faster LTE capabilities, and maybe even the ForceTouch technology we saw in the Apple Watch.
Also expect Apple to team up with the big cell phone carriers whose subsidy and payment installment plans rip you off.
What You Need to Know about Apple and the Big Carriers
In the past few months, we’ve seen the big carriers move away from contracts explicitly based around a two year plan. Smaller players like T-Mobile, Republic, and Straight Talk have influenced consumer consciousness enough that Verizon, ATT, and Sprint know a two year contract is seen as an unpopular option. Those lofty two year contracts, though, were very good at one thing consumers love; they lowered the initial stocker shock for smart phones like the newest Apple installment.
As most of us know, Apple operates on a tiered pricing system based on release schedule. Right now, consumers who sign onto a new two year contract could pay $299 for the entry model iPhone 6 Plus (the latest release), $199 for iPhone 6, $99 for the iPhone 5s, or they could get the iPhone 5C for free.
Don’t let the advertising fool you, though. iPhones were never sold at those price points.
Apple gets away with advertising those prices because the big carriers would subsidize the remaining cost of your phone as part of your two year contract. You traded your freedom to pursue a better deal for hundreds of dollars that would be spread out month to month within your hefty plan. It was a win/win for businesses, and, I’ll concede, for those absolutely desperate for the latest iPhone model, but for most consumers, it was a really bad deal.
So what’s changed without two year contracts?
Here’s where I really need you to pay attention. Very little is going to change in our quasi post contract world. Expect that Apple will talk about the low entry fees associated with the brilliant new phone we meet this Wednesday. Apple needs to talk that up because otherwise, the sticker shock of iPhones priced at $800+ would let Samsung hammer in the nails to the iPhone’s coffin. iPhones needed to be affordable, but they’re an incredibly sophisticated piece of technology. Apple was never going to give these phones away, but consumers weren’t suddenly going to pay hundreds of dollars more to own them. Something had to give.
So what did Apple do? Team up with the big carriers (insert my shock here.)
Rather than selling you a two year contract, the big players in cell service are now going to offer you the opportunity to place a deposit on your phone (hmm, I bet a tiered model starting at $299 and working its way down would do just fine) and allow you the chance to pay the rest of your phone off month to month within a set amount of time.
Are they kidding me? Isn’t this just a two year contract?
No, of course they’re not. Yes, of course, it is. It has a different name, it has a slightly different structure, but for all intents and purposes, nothing’s changed at all. This is business and business is not about your freedom.
So what should Hatters, who want to be free but also love iPhones do? Stay tuned for Apple Announcement September 9th: What You Need to Do (Part 2) to find out. Want that post ASAP? Like our Facebook page to get the quickest notification of when new posts arrive.