iPhone 5 Is Not Coming to T-Mobile, but Carrier Stands to Benefit

 
 
By Michelle Maisto  |  Posted 2012-09-13 Email Print this article Print
 
 
 
 
 
 
 

T-Mobile won't offer the iPhone 5, but the carrier could indirectly benefit from it, according to a new Strand Consult report, which also called the new iPhone's design a "minor facelift."

T-Mobile will not be among the U.S. carriers that will begin selling the iPhone 5 Sept. 21. And for this, it's relatively lucky, suggests a new report from Copenhagen-based research firm Strand Consult.

The Apple iPhone 5 offered "no big surprises," the firm's analysts wrote in the Sept. 12 report that, from the perspective of network operators, criticized Apple and its practices.

While the new iPhone is a win for Apple and its shareholders, said the report, "Strand Consult has no doubt that the iPhone 5 will be the iPhone that will create the greatest negative impact yet on a number of mobile operators' revenue over the coming months."

To this end, the report continued, "A least there is one winner amongst operators ... operators like T-Mobile in the U.S. that focus on SIM-only products for old iPhone."

T-Mobile earlier this month launched an ad campaign encouraging owners of unlocked iPhones-out-of-contract devices no longer beholden to a specific carrier-to switch to its network. While T-Mobile doesn't sell an iPhone and its network can't support the speeds the iPhone is capable of-though T-Mobile claims that iPhone 4S devices running over Evolved High-Speed Packet Access (HSPA+) 4G on its 1900 network have clocked download speeds 70 percent faster than on AT&T's network-what it can offer are lower prices than most iPhone-offering carriers.

As of Sept. 12, T-Mobile has iPhone 4S demo units in its stores and staff trained to help customers set up iPhones on the T-Mobile network. These may be people looking to lower their monthly wireless bill, though more likely inheritors or purchasers of unwanted 4S handsets.

"What will happen to all the old iPhones when people purchase a new iPhone 5? ... They of course try to sell them or give then to their family members. So where will the new users of old iPhone models purchase their SIM cards and thereby their traffic?" asked Strand. "The answer is they will purchase their voice and data where it is cheapest, and in many countries that will be from a no-frill MVNO or from operators such as T-Mobile USA that sell SIM-only products to iPhone users."

Strand went on to argue that the iPhone 5 received "basically a minor facelift," and so will fail to attract new users. "Probably everyone who purchases a new iPhone will be existing iPhone customers."

Data from SellCell.com, a site that connects sellers of older phones with buyers, supports at least the second assertion. SellCell.com told eWEEK that in the month leading up to the iPhone 5's introduction, resales and trades of iPhones were up nearly 434 percent, compared with the weeks before the iPhone 4Ses introduction. The site's latest September data also showed Apple devices to account for the largest percentage of trade-ins on the site (29 percent). Samsung and HTC, the second and third brands keeping the site busy, accounted for 17 and 15 percent of trade-ins, respectively.

As for the first assertion, not everyone agrees. IHS analyst Daniel Gleeson, in a Sept. 12 report, called the iPhone 5 "a significant departure from previous models" and the larger screen a "fundamental change in product design."

While T-Mobile would very much like to sell the iPhone 5, its Long-Term Evolution (LTE) network won't be in a position to support it until 2013. For its late-comer status, argues Strand, it can count itself lucky, as the larger and older an operator's iPhone base, the more costs it will accrue from the new iPhone.

"We are certain that many of Apple's original and largest partners will experience an explosion of churn and that the money they will need to spend on subsidies and dealer commissions will have a negative influence on their revenue during the coming months."

This perspective sheds light on how, during the second quarter of this year, Verizon Wireless announced record margins and strong revenue growth and AT&T posted its highest-ever wireless margins and also a strong boost to income, while both saw iPhone sales fall.

Strand added that it's possible we'll again see "mobile operators issuing profit warnings due to large subsidies for the new iPhone."

Follow Michelle Maisto on Twitter.

 
 
 
 
Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University, and in her spare time obsesses about food. Her first book, The Gastronomy of Marriage, if forthcoming from Random House in September 2009.
 
 
 
 
 
 
 

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