T-Mobile USA Inc., the fourth- largest U.S. wireless carrier, began offering Apple Inc. (AAPL)(AAPL)’s iPhone for the first time today, providing the biggest showcase yet for its new installment-plan approach to selling phones.
Customers line up to purchase the Apple Inc. iPhone 5 from a T-Mobile USA Inc. retail location in New York. Photographer: Scott Eells/Bloomberg
Customers with good credit can buy the iPhone 5 for $99.99 down and 24 monthly payments of $20, the Bellevue, Washington- based company said, breaking from a tradition of subsidizing smartphones in exchange for two-year service contracts. T-Mobile also will take old iPhones as trade-ins for a new iPhone 5 with no down payment and a credit toward future bills.
The strategy “could resonate with customers,” Walt Piecyk, an analyst with BTIG LLC, said this week in a research note. At about $100, the upfront costs for an iPhone 5 through T-Mobile are lower than the $199 typically charged by rivals.
T-Mobile, a division of Deutsche Telekom AG (DTE), is counting on the Apple device to help reverse an exodus of subscribers. The company was the last of the four major U.S. carriers to get the iPhone, and T-Mobile has trailed competitors in adopting a speedier network standard called long-term evolution, or LTE.