Business

AT&T opens iPhone price war

Company offers buy-one-get-one-free deal

Reuters

Tim Cook, CEO of Apple, speaks about the iPhone X during a launch event in Cupertino, Calif., on Tuesday.
Reuters Tim Cook, CEO of Apple, speaks about the iPhone X during a launch event in Cupertino, Calif., on Tuesday.
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The promised truce among wireless carriers is over.

After vowing to avoid a repeat of the blistering iPhone price war of last year, AT&T will fire the first shot — offering a free iPhone with the purchase of another, for customers who also subscribe to its DirecTV satellite service.

The buy-one-get-one-free promotion starts Friday and applies to the iPhone 8 and 8 Plus, among other phones. AT&T hasn’t said whether the deal 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.

Under pressure to find new customers in a market where every adult already has at least one phone, the wireless companies duked it out with cutthroat pricing on the iPhone last year.

The giveaways took a toll on margins, costing about $200 per subscriber in the second half of 2016, according to Jefferies Group LLC.

“We had to over-promote” to compete with plans from rivals such as T-Mobile US, but that further improved customer loyalty, Verizon Communications CEO Lowell McAdam said in an interview Wednesday at Bloomberg’s Sooner Than You Think conference in New York.

T-Mobile, which was the first and most aggressive on price last year, said it was steering clear this time around. Instead, the company plans to offer 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.

The other top carriers have been relatively restrained so far.

l Sprint Corp. Chief Executive Officer Marcelo Claure, in a series of GIFs on Twitter Tuesday, introduced a half-off lease for the iPhone 8 and 8 Plus. The deal requires a trade-in of the iPhone 7.

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l Verizon is offering a $300 credit on the iPhone 8 and 8 Plus with trade-in. The company’s list price for the iPhone 8 is $699.99 or $29.17 a month for 24 months, and $799.99 for the 8 Plus or 24 monthly payments of $33.33.

l AT&T customers who purchase an iPhone can also get an iPad for $99.99. The deal requires a 2-year wireless service contract.

l All the carriers sell the connected Apple Watch. The device needs a $10-a-month data plan. As part of the deals, carriers are giving away the first three months of wireless service.

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