T-Mobile, the smallest of the "big four" wireless carries in the United States, already offers the country's cheapest iPhone service -- if you have an unlocked iPhone. And according to Engadget's Brad Molen, more than a million unlocked iPhones are on T-Mobile's network already.
Now, T-Mobile has announced that it will "add Apple products to its portfolio in the coming year," according to parent company Deutsche Telekom AG. And while that could mean anything from the new iPad Mini to an as-yet-unreleased Apple product of some kind, many expect T-Mobile to finally get the iPhone, making it the last major carrier in the United States to get it.
If T-Mobile does, and it continues to offer its $30 "Unlimited Web & Text with 100 Minutes" plan, that may make T-Mobile's iPhone the cheapest one out there -- even if it costs hundreds of dollars more up front than on AT&T.
Subsidies aren't just for big corporations
Most of the big-name wireless carriers in the United States offer what are called "subsidized" smartphones, meaning you don't pay their whole cost up front. Instead, you pay a discounted price (which can be as little as $0.01), but are locked into a wireless contract for up to 2 years. Wireless customers who switch before their contract is up have to pay an "early termination fee," which can go over and above the actual cost of the smartphone.
Buy now, save later
With prepaid smartphone plans, on the other hand, you pay the whole cost of the phone up front and afterward it's yours to keep (whether its SIM card is locked into one network or not). And with the announcement that T-Mobile is going prepaid-only starting next year, that means any iPhone the company carries will be of the unsubsidized variety.
Apple currently sells the 16 GB iPhone 5 for $649, contract-free, on its website. It also sells the 16 GB iPhone 4S for $549, however, while contract-free carrier Virgin Mobile sells the same phone unsubsidized for $449 with a $35 per month data plan -- not too much more expensive than T-Mobile's.
Lessons of the past
It's hard to say how much T-Mobile would offer an iPhone 5 for if the device landed on its network. Virgin Mobile started out charging more up front and offering a $30 plan, while Cricket currently sells the contract-free iPhone 5 for $499 but its service starts at $55.
Assuming T-Mobile continues to offer its current "web exclusive" $30 unlimited plan for a hypothetical iPhone 5 on its network, it's not likely to be discounted much if at all from Apple's asking price. Just paying for 5 GBs of data per month from AT&T would cost $1,200 over 2 years, however, plus the $199 cost of a subsidized iPhone (and you have to pay for voice minutes and texting on top of that). Meanwhile, it's possible right now to buy an unlocked iPhone 5 from Apple and get 2 years of T-Mobile's $30 service for $1,369. That includes 5 GBs of data before connection speed throttling, plus unlimited texting and 100 voice minutes per month.
Looking to the future
T-Mobile offers the cheapest iPhone 5 service right now. And if the "Apple products" T-Mobile is getting next year include the iPhone 5, T-Mobile customers may see even better offerings coming their way in the near future.
Jared Spurbeck is an open-source software enthusiast, who uses an Android phone and an Ubuntu laptop PC. He has been writing about technology and electronics since 2008.
- Technology & Electronics