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Digital Media, marketing

For iPhone Users, Plans Get Cheaper –


The economics of the iPhone are changing fast.

For years, cheaper, contract-free offers from prepaid wireless carriers got little attention from many consumers because those companies weren’t offering the most highly desired phones. That is no longer the case, which means that for people in the market for a new, high-end smartphone, month-to-month plans could be worth another look.

On Thursday, Sprint Nextel Corp.’s Virgin Mobile said it would start offering the iPhone, becoming the second prepaid brand after Leap Wireless International’s Cricket to carry the Apple Inc. device. The price at Virgin for a 16-gigabyte iPhone 4S is an eye-popping $649. But because Sprint isn’t discounting the phone, the company is able to offer monthly plans at much lower prices—as little as $30 a month.

As a result, while your up-front cost is higher when signing up with Virgin Mobile, the savings start adding up after about a year.

Using plans that offer unlimited voice as a comparison, you’d save $400 in the first year picking a Virgin iPhone over one offered by AT&T or Verizon Wireless. After two years, the savings grows to more than $1,200.

AT&T CEO Randall Stephenson said last week that the savings are compelling, but buyers seem to be very sensitive to increases in the initial cost of the iPhone. AT&T would look at offering such plans if demand holds up, he said.

Here’s a comparison of how much you’d spend on an iPhone and a wireless service plan with the major U.S. carriers that offer it today:

 

Carrier/Plan 1-Yr Cost 2-Yr Cost

Virgin

Unlimited*: $649 (phone), $50/month (plan) $1,249 $1,849

Unlimited data/text; 300 talk minutes: $649 (phone), $30/month (plan) $1,009 $1,369

Cricket

Unlimited**: $500 (phone), $55/month (plan) $1,160 $1,820

Sprint

Unlimited: $200 (phone), $100/month (plan) $1,400 $2,600

AT&T

Unlimited***: $200 (phone), $120/month (plan) $1,640 $3,080

Unlimited data/text; 450 talk minutes: $200 (phone), $90/month (plan) $1,280 $2,360

Verizon

Unlimited****: $200 (phone), $120/month (plan) $1,640 $3,080

Unlimited data/text; 450 talk minutes: $200 (phone), $90/month (plan) $1,280 $2,360

*Virgin slows data traffic after 2.5GB per month

**Leap slows data traffic after 2.3GB per month

***AT&T plans include 3GB of data per month

****Verizon plans include 2GB of data per month

via For iPhone Users, Plans Get Cheaper – Digits – WSJ.

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About Bob Innes

Who am I and what I do best! I am a skilled Sales and Marketing team player known for performing behind the scenes miracles that increase base distribution, improve customer relationship management, exceed annual sales volume,and profitability for Consumer Packaged Goods companies. And I've been doing it for over 15 years. My successful contributions include such clients as Kraft Foods, Mars, Bumble Bee Foods, Unilever, Johnson and Johnson and SC Johnson, and JM Smuckers.

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