The Sprint Nextel Corporation has recently unveiled plans to offer Apple’s famous iPhone smartphone on a prepaid plan basis, bypassing Apple’s once stringent insistence on two year carrier contracts with their popular product.
At the moment, Spring Nextel plans to sell the 16 gigabyte model of the smartphone for $649, hundreds more than the usual retail price but roughly the same as sold in Apple’s stores, but without the compensating costs of the two year data plans typical to other companies carrying the iPhone.
“While we still question how many of these customers will be able to afford the device at the point of sale, we believe Sprint has structured the price points of this plan in a way which significantly reduces the risk” of material margin degradation, Wells Fargo analyst Jennifer Fritzsche said in a note to clients. “We see this trade-off as a very good thing.”
Further, Sprint Nextel plans to offer unlimited data plans at a third of the cost of competing data plans.
The move is seen as something of an experiment to see if customers will pay a greater upfront cost for a single device without a post paid carrier contract.
It is also a move that will help Sprint reach its 15.5 million unit purchase commitment to Apple.