Why iPhone 7 or­ders are soar­ing at T-Mo­bile and Sprint

Financial Mirror (Cyprus) - - FRONT PAGE -

T-Mo­bile US Inc. (NAS­DAQ: TMUS) CEO John Legere said on Tues­day morn­ing that pre-or­ders for the new Ap­ple Inc. (NAS­DAQ: AAPL) iPhone 7 and 7 Plus are the high­est in TMo­bile’s his­tory. Sales at Sprint Corp. (NYSE: S) were up 375% com­pared with last year’s sales.

This might be one of those chicken-and-egg quan­daries: which came first, the two com­pa­nies’ un­lim­ited data plans or the new iPhone? By the cal­en­dar, of course, the un­lim­ited data plans pre­ceded the new de­vices by months. But if one car­rier has noted a qua­dru­pling of sales and the other is say­ing that sales have never been higher, then maybe the iPhone is the more at­trac­tive.

In any event, the pro­nounce­ments from T-Mo­bile and Sprint are good news for Ap­ple be­cause iPhone sales gen­er­ate nearly two-thirds of the com­pany’s quar­terly rev­enues. Ap­ple al­ready has fore­cast a third con­sec­u­tive quar­ter of de­clin­ing rev­enue and whether sales of the new iPhones can turn that around re­mains to be seen.

Ap­ple it­self will not re­port its first week­end pre-or­ders this year. The com­pany said last week that first-week­end pre­orders are a bet­ter in­di­ca­tor of sup­ply than de­mand. The of­fi­cial re­lease date for the new phones is Septem­ber 16, but Ap­ple’s ini­tial quotes of ship­ping two to three weeks af­ter that date were soon pushed out to four to six weeks for some mod­els, es­pe­cially the new black and space black phones. That could mean no new iPhone un­til Novem­ber.

A re­port at FierceWire­less also notes how heav­ily pro­moted the new iPhones are, not only at T-Mo­bile and Sprint, but at Ver­i­zon Wire­less Inc. (NYSE: VZ) and AT&T Inc. (NYSE: T) stores. All four car­ri­ers of­fer a free iPhone 7 with 32 gi­ga­bytes (GB) of mem­ory to cus­tomers who trade in an iPhone 6 (or newer model) and agree to a 24-month ser­vice agree­ment. An an­a­lyst at BayStreet Re­search told FierceWire­less: “These pro­mo­tions are not zero down or free on con­tract where the ser­vice plan has a de­vice pay­ment built in. This is free as if you are bring­ing your own de­vice to the car­rier and only pay­ing for ser­vice. A con­sumer with an iPhone 6 or higher that is com­pletely paid off can trade in their de­vice with any of the big 4 car­ri­ers and re­ceive a free 32gb iPhone 7 af­ter 24 monthly billing cred­its, mean­ing their bill will not in­clude a ~$27 a month charge for their de­vice de­pend­ing on car­rier. This al­lows a cus­tomer who pur­chased an iPhone 6 un­der EIP [equip­ment in­stal­ment plans] and paid it off af­ter 24 months to en­joy pay­ing noth­ing a month for their de­vice but have a new iPhone 7.”

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