After missing the previous six Apple (NASDAQ: AAPL ) iPhone introductions, T-Mobile (NYSE: TMUS ) is ready for its first side-by-side launch of a new iPhone line-up with AT&T, Verizon, and Sprint. And as it turns out, the self-described un-carrier may have a few key advantages over its peers when it launches the new iPhone line-up.
T-Mobile's new plans are proving successful
T-Mobile is attempting to differentiate itself from its bigger rivals. It launched interesting new plans by dropping contracts and introducing interest free financing on new phones.
The unorthodox methods seem to be working. In early August, T-Mobile reported its first subscriber jump in years, adding 688,000 net additional subscribers during the quarter. The gains in customers were five times what analysts expected, according to Moffett Research analyst Craig Moffett. The company's attrition rate on current customers plans was the lowest ever, at 1.6%, versus 2.1% in the year-ago quarter.
It's the first introductory iPhone with T-Mobile
It was less than six months ago when T-Mobile began selling previously released iPhone models. Therefore, there is still a very good chance that a large number of T-Mobile customers are planning on upgrading to a new iPhone model when the iPhone 5S and the iPhone 5C go on sale on Sept. 20. Since T-Mobile is the only carrier that will be launching a new iPhone model for the first time, the carrier could post lower attrition rates than its peers; pent-up demand for the iPhone on the network could be the deal-breaker for many borderline customers.
According to T-Mobile, the iPhone accounted for a whopping 26% of sales during its most recent quarter. The company's record low attrition rate was likely at least partly due to the availability of an iPhone for the first time. Imagine the positive impact on attrition with a new iPhone model being available for the first time at launch.
The Jump! program will encourage upgrades
T-Mobile's Jump! program offers its subscribers a way to upgrade more frequently once every six months -- far more frequently than subscribers on subsidized plans can upgrade without paying the full price up front for a new phone.
What's the takeaway for investors?
Though T-Mobile is new to the iPhone game, it may be in a strategic position to see proportionally larger iPhone subscriber gains than its peers when the new phones hit the shelves on Sept. 20.
For Apple, a new, strategically positioned carrier adds to the initial demand the company must fulfill. Apple will probably be supply-limited, as usual. The carrier's 44 million subscribers are nothing for Apple to scoff at. The question, once again, will probably be: How many iPhones can Apple supply, and how quickly?
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