Sprint Corp. came out with the most aggressive offer yet on Apple Inc. iPhone prices by offering a free phone with a trade-in, challenging its larger peers to follow suit or face subscriber losses with bargain-hunting customers.
Starting Monday, new and existing Sprint customers can get an iPhone 8 if they trade in an iPhone 7, Samsung Galaxy S8 or Samsung Note 8. People with older iPhones, and recent models from Samsung, Motorola, Google Inc. and LG Electronics Inc. can qualify for half-off prices on the iPhone 8, according to a Sprint statement.
After vowing to avoid a repeat of the blistering iPhone price war of last year, Sprint set the lowest price yet this time around. Last week, AT&T Inc. started the battle by offering a buy-one-get-one-free iPhone deal for customers who also subscribe to its DirecTV satellite service.
AT&T’s promotion started Friday and applies to the iPhone 8 and 8 Plus, among other phones. Neither Sprint nor At&T have said whether their deals will be extended to Apple’s most expensive phone ever -- the $999 iPhone X, aka 10 -- which marks a decade since the company entered the phone business.
With almost every person in the U.S. having at least one phone, the carriers are under pressure to find new customers. Last year, the wireless companies got tangled in cut-throat pricing on the iPhone, an episode the top four carriers didn’t want to repeat. The giveaways took a toll on margins, costing about $200 per subscriber in the second half of 2016, according to Jefferies Group LLC.
“We led the way with free iPhones last year and within a few days, everybody had copied it and we looked at ourselves and said, OK, well, what exactly did that accomplish? Not a lot,” T-Mobile US Inc. Chief Operating Officer Mike Sievert said Thursday at an investor conference.
So far this year, T-Mobile has stayed true to its vow and steered clear of giveaways. Instead, the company offers a $300 trade-in credit for customers buying the iPhone X, as well as the new 8 and 8 Plus. The trade-in must be an iPhone 6 or newer.
Sprint fell 1.3 percent to $7.59 at 11:30 a.m. in New York, while T-Mobile slid 0.3 percent to $61.01.
The other top carriers have been relatively restrained so far.