Apple Inc. and consumers will emerge as winners from the launch of the new iPhone 5G series, as the phone company sector has decided to renew offers and financing for the best performing smartphones of the moment in wireless technology, something that has not happened for at least five years.
But the hefty discounts could end up hurting managers. Consumers are keeping their smartphones for longer and longer but, according to some analysts, Apple's new iPhone 12 (Apple shares in real-time) just announced, which offer 5G connectivity and a wider range of display sizes, could drive a large replacement stream.
Wireless carriers, eager to take advantage of the opportunity and be competitive, are formulating the new offers to both attract new customers and retain existing ones.
Can the promotions of the US telephone companies on the iPhone 12 generate a real "super cycle" for Apple?
The most generous offer so far comes from US operator AT&T Inc. which will give new and non-new customers an $ 800 credit on a new iPhone when swapped for an iPhone 8 or newer device, in what the company claims is a ' “limited time” offer for those who activate devices on one of its unlimited plans.
T-Mobile US Inc., on the other hand, is offering half the iPhone 12 Pro in billing credits, or $ 500 off any iPhone 12 device, to those who return their old smartphones. Apple will certainly benefit from strong carrier funding that spurs a generation turnover of smartphones, said Walter Piecyk, an analyst at LightShed Partners, as roughly 70% of iPhone sales in the US were from Apple stores before the COVID crisis. -19, according to his estimate.
Whether these promotions can help drive a true "super cycle" for Apple remains to be seen, as the US accounts for less than half of Apple's total sales and there is no such kind of buyer finance in Europe or Asia.
The company's only real super cycle, from Piecyk's point of view, was when Apple expanded its screen size range during the launch of the iPhone 6, and that dynamic can recur because there is a possibility. that the new iPhone 12 Mini "really appeals to markets that have wanted it," he said.
The difficult position of telephone operators
Conversely, the benefits for wireless operators are far less certain. The heavy promotional approach seems to escape the wisdom of past launch cycles. T-Mobile launched expensive promotions during the iPhone 7 cycle that started in 2017 and which forced rivals to follow suit. A year later, T-Mobile's current CEO and then COO Mike Sievert admitted that such an aggressive promotional strategy didn't pay off as the rest of the industry was doing the same thing.
