Since taking over the company a little over a month ago, Sprint (NYSE:S) CEO Marcelo Claure has moved quickly to reverse the fortunes of the No. 3 wireless carrier in the United States. He has lowered prices, dropped the confusing "Framily" plan, and generally been much more aggressive than his predecessor, Dan Hesse.
Now, Claure has moved quickly and boldly again in an attempt to benefit from Apple's upcoming release of its latest iPhone model. The Sprint CEO reached out to Apple (NASDAQ:AAPL) early in his tenure, flying to San Francisco to meet with the company's CEO, Tim Cook, on his first day on the job, CNN Money reported. What he pitched Cook was a new pricing plan called "iPhone for Life" that offers unlimited data at a lower price than Sprint's existing contracted plan along with a new iPhone at no upfront costs. People who join the plan would have the right to upgrade every two years to the latest iPhone.
Cook agreed and Sprint was able to announce the deal at the same time it launched pre-ordering for the new phone.
"For Apple to stand behind something like that, they got to believe in it. They are using their name," Claure said last week at a Goldman Sachs media and telecom conference.
What is iPhone for Life?
iPhone for Life lets customers get a new iPhone at no uprfront cost with an unlimited data plan for $50 plus a $20 monthly fee to lease the phone. That fee covers the 16GB iPhone 6, with the 6 Plus costing $25 a month, and prices varying for phones with larger storage capacities. Because the phone is being leased, the customer does not actually own it. The deal "guarantees" access to a new device every two years, but the fine print in the Sprint press release announcing it, makes it clear that pricing could change.
Is it a good deal?
Sprint attempts to make it clear on its website that iPhone for Life is the best way for its customers to purchase the new iPhone. The company offers three ways to get the new phones (aside from paying full retail for it) the iPhone for Life lease, a finance plan, and the traditional subsidized contract offer.
Daniel Kline is long Apple. He has ordered a new iPhone 6 on a subsidized contract plan. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.