Apple and T-Mobile (USA) had just teamed up to finally get the iPhone onto one of the biggest networks in the USA. Big news across the pond, but why should those of us in Britain care? Firstly because T-Mobile is experimenting with new pricing structures which if successful could change the way we pay for our smartphones. Secondly because Apple has just updated their iPhone, not just for T-Mobile customers, but for everyone.
T-Mobile has lost a lot of customers in recent years from not carrying the iPhone and many of its customers unofficially bought an unlocked iPhone to use with them. Many Brits visiting the USA for longer than a typical holiday, myself included, buy T-Mobile packages due to their no contract unlimited data packages. Sadly up until now iPhones have largely been limited to really slow 2G speeds on their network due to radio compatibility issues.
Firstly T-Mobile’s new payment pricing. Most of the world is used to two models of getting a mobile phone, the first through carrier subsidy. Basically you get a phone for free or for a relatively low cost in exchange for paying a higher tariff monthly. The vast majority of Brits with smartphones do this as the alternative, the second way people currently buy smartphones, has too much upfront expense. That way is buying the handset unlocked from the manufacturer, then getting service for it. It typically works out only slightly cheaper or around the same price, but requires you to pay a lot for the handset. iPhones typically start at around £500 depending on the model. T-Mobile’s plan is to introduce a model between these two extremes. You buy the plan with them without getting a phone, but then can buy a phone for a monthly fee plus a one off payment. The iPhone pricing will be a $99 payment then $20 monthly for two years, bringing the total cost to $579 which is actually cheaper than buying the phone from Apple which is currently $649. You get the benefits of paying for your phone over a long period while not being tied into a contract for service.
If T-Mobile succeed in convincing customers to switch to this model of buying phones in the US it’s likely that other carriers, including those in Britain, will adopt it themselves. This could be good for consumers as it will allow us to switch carriers when there’s a better deal or if our current carrier isn’t performing well, however a downside is that it might also lead to carriers raising their prices.
The second important announcement today is that a new iPhone 5 will not be identical to the ones that came previously, and not just for ones sold by T-Mobile. Not many people will notice the change as it’s only a small update largely due to needing to make changes to the radio to work with T-Mobile, but Apple used it as an opportunity to introduce support for wideband audio which gives much crisper better quality phone audio described by some as HD calling. While many won’t notice the difference, if you use your phone to call a love one you’ll likely appreciate the more realistic sound of their voice with this new technology.