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T-Mobile to carry the iPhone 5 on April 12th for $99 up front

At long last, T-Mobile will carrying the Apple iPhone starting on April 12th.  The fourth place carrier announced the news during a press event in New York on Tuesday.  T-Mobile, the fourth largest carrier in the US …

The Verge Dan Seifert

Context & Ripple Effects

T-Mobile had signaled iPhone network compatibility in 2012, and its CEO said in January 2013 that iPhone sales would accompany a reduction in subsidies. The March 25 event preview made the device announcement expected.

The iPhone arrives alongside T-Mobile’s Uncarrier plans, which replace two-year contracts and traditional handset subsidies with separate service pricing and an upfront device payment. That makes the iPhone launch a test of whether a carrier long missing Apple’s flagship can use pricing structure, not exclusivity, to compete.

First-order effects

  • T-Mobile fills a long-standing iPhone gap in its handset lineup on April 12, giving customers access to the iPhone 5 with $99 paid upfront rather than a conventional subsidized-contract offer.
  • Apple gains a fourth major US carrier channel for the iPhone, while T-Mobile ties a high-demand device to its contract-free Uncarrier plans.

Second-order effects

  • T-Mobile’s carrier rivals face a more direct comparison between their subsidized, contract-led offers and a T-Mobile iPhone plan that separates service from device financing.
  • T-Mobile’s handset economics shift toward collecting more of the phone’s price outside the monthly service plan, making installment terms and total customer cost central to its iPhone pitch.

Third-order effects

  • If customers accept the model, flagship-phone competition may move away from two-year-contract subsidies toward transparent service pricing plus device financing.
  • The launch points to carrier differentiation becoming less dependent on exclusive handset access and more dependent on how carriers package network service, financing, and switching terms.

The trend: US wireless pricing is moving toward decoupling smartphone financing from service contracts, using marquee devices such as the iPhone to validate the model.

Related: T-Mobile · Apple iPhone · T-Mobile previews its iPhone announcement · T-Mobile’s iPhone compatibility plan · What the iPhone 4S meant for carriers

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