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The woman at the Manassas, Va., T-Mobile store sounded frazzled. “We’re slammed,” she said, and suggested that if I wanted to buy an iPhone 5 from T-Mobile in the DC area, it might make sense to make an appointment.
A salesperson at another T-Mobile store in the Washington suburbs said that the store had to borrow line management ropes and stands from a nearby Best Buy in order to handle the crowds. Another store reported very strong sales; a salesperson there said that he was dreading when everyone gets off from work. “I don’t know what’s going to happen then. I hope we’re ready.”
The sales staffs at the Washington-area T-Mobile stores said that the fact that they were in an area served by T-Mobile’s newly launched LTE seemed to spur a lot of sales. “Everybody wants to know how fast the LTE is,” one salesperson said. “All I know is that it’s really fast.”
At each store that I contacted in the DC suburbs there seemed to be amazement at the response to the opening day of iPhone sales for T-Mobile. While at least some of the people working at these stores had at least witnessed the long lines of customers at Apple and AT&T stores in previous months, they’d never actually experienced anything like this.
So why the rush to buy an iPhone 5 from T-Mobile? After all, this phone has been out for six months. You’d think that everyone who wanted one would have it by now. Part of the reason is that T-Mobile is offering features that other carriers aren’t and part of the excitement is that T-Mobile is offering a much better deal than anyone else including Apple.
The T-Mobile deal works like this. If you want to buy an iPhone from T-Mobile, it will cost you $99 for the 16GB version, plus monthly payments to T-Mobile of $20 per month for 24 months. The net cost, since T-Mobile isn’t charging interest is $579 for an unlocked iPhone. You can buy the same phone, complete with a T-Mobile SIM from Apple, for $649. That’s a $70 discount.
On top of that, there’s no contract. While you still have to pay T-Mobile for the phone they sold you, it’s an unlocked phone, so you can use any GSM nano-SIM. Or you can use T-Mobile’s unlimited plan for $70 per month. That’s also cheaper than the competition.
In addition if you live in one of the areas with LTE (the Washington, DC area for example) then you get better data rates than you get from any other carrier.
T-Mobile iPhone Sales Jam Company Stores in Washington DC, Elsewhere
My tests of LTE in the DC suburbs averaged about 27 mbps for download speeds and 13 mbps for upload speeds using a BlackBerry Z10. I never had the chance to test the LTE speeds on T-Mobile’s network with an iPhone 5 because my tests of the iPhone 5 on T-Mobile’s network predated the launch of LTE. However there’s no reason to think they’d be much different from the LTE speeds iPhone users are experiencing now.
T-Mobile is also offering HD voice on the iPhone, which is something else that I wasn’t able to test at the time of my evaluation of a T-Mobile iPhone. I’m not sure it would help since there’s no reason to believe that I have a high-definition voice, but apparently it sounds good.
The real bottom line, though, is that T-Mobile is showing that it is possible to sell the iPhone and make it a good deal for consumers. The phone is less expensive, the service is less expensive and you get a little more in the process. So what’s the rest of the industry going to do about it?
Probably nothing at first. The other three carriers are kind of stuck with their plans and prices for the immediate future. Considering how profitable these plans are, they have little reason to change. At least not now. But that could change.
What would cause this change to happen is the T-Mobile trade-in program. In addition to selling the iPhone at a discount, T-Mobile is also offering to accept earlier-model iPhones as trades on the new one. The trade-in value can be as high as $140 depending on the phone and the condition. That can come off the top of the iPhone you’re buying, or it can be used in other ways on your phone bill. But what that means is that some customers will be getting iPhone 5 devices for less than $450.
What this could mean is that the other carriers could start seeing their out-of-contract customers, or people who are almost out of contract trading in their phones to get a T-Mobile iPhone and never looking back. If enough of their customers do this then the competing carriers will have no choice but to pay attention.
The result has only one outcome–the other carriers will have to lower their prices and modify their contract requirements, or eliminate contracts to match T-Mobile. If this happens it means is that everyone wins, regardless of who your wireless carrier is.