T-Mobile US Inc. (NASDAQ: TMUS) generally is seen as the most aggressive of the four big wireless companies in terms of low-priced deals to gain subscribers. That apparently has worked as the company has gained customers in the past two years while rivals Verizon, AT&T and Sprint have lagged in terms of customer additions. T-Mobile launched a new initiative for the Apple Inc. (NASDAQ: AAPL) iPhone 8 that will make those rivals look at their own plans to make certain they are competitive, even if it erodes their margins.
The new promotion offers customers who switch from other carriers $300 off an iPhone 8. The deal assumes the new customer stays with T-Mobile for 24 months, and cancellation terms are stiff:
Via 24 monthly bill credits with finance agreement and eligible device trade-in. If you cancel wireless service, remaining balance on your smartphone may become due & you may lose credits; contact us for details.
T-Mobile has a dizzying array of other offers, so it is hard to tell if the iPhone 8 is the best one, or for whom it is best. That makes it similar to plans from other carriers that are equally vexing.
One fact about the new promotion is that it will add to the cutthroat competition that has made the wireless business much less attractive than it used to be for carriers. The estimated number of cellphones in the United States is over 300 million, and most are presumably smartphones. Manufacturers release new smartphones at a rapid pace, with Samsung and Apple certain to keep their huge market shares at the expense of the next tier of companies, which include LG, Motorola and Kyocera.
The iPhone 8 is the newest battleground among the carriers. It will remain a popular product for months, if not longer. That will make it another device that drives up customer discounts and drives down carrier profits.