Anticipating Verizon iPhone, T-Mobile wages smartphone price war

Anticipating Verizon iPhone, T-Mobile wages smartphone price war

Summary: To counter a Verizon iPhone, T-Mobile is moving aggressively to push prices down on premium smartphones and appeal to low-end customers. It might just work.

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If you're not AT&T or Verizon and don't have Apple's wildly popular iPhone at your disposal, how do you gain customers -- or better yet, stem the tide of losses that's already underway?

If you're T-Mobile, you aim for the bottom.

A Wall Street Journal report notes that the beleaguered carrier, the smallest of the four major U.S. wireless carriers, is "aggressively heading down market" in the smartphone business.

Roger Cheng reports:

Chief Executive Philipp Humm said in an interview that many of his smartphones will eventually be made up of Google-powered phones costing less than $100, half as much as the smartphones typically available at U.S. carriers. In October, to lower the cost of monthly bills, Mr. Humm introduced a limited data plan that costs $10.

The target: low-end or prepaid customers.

It's an interesting dynamic in a market that seems to react only to the successes of the most popular (and most expensive) smartphones, like the iPhone, Motorola Droid X, and HTC Evo 4G.

That's a good thing for customers shopping for a new contract, and bad for the carriers themselves -- at least temporarily. (After all, your data usage will eventually make up the difference.)

The question is whether T-Mobile can get the subscriber base to make a high-volume but low-margin customer base as profitable as one from a larger carrier. (One added variable: will a large carrier like AT&T use Windows Phone 7 as a hedge to this? Last night, a television ad showed the $99 Samsung Focus, a WP7 handset.)

But make no mistake: as Verizon and AT&T pursue the top of the market with an iPhone, T-Mobile and Sprint are looking to steal the customers left in their wake.

Related on ZDNet:

Topics: Smartphones, Hardware, Mobility, Verizon

Andrew Nusca

About Andrew Nusca

Andrew Nusca is a former writer-editor for ZDNet and contributor to CNET. During his tenure, he was the editor of SmartPlanet, ZDNet's sister site about innovation.

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4 comments
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  • RE: Anticipating Verizon iPhone, T-Mobile wages smartphone price war

    I'd be all over T-Mobile and a WP7 phone but T-Mobile just doesn't have the coverage in my area.
    Loverock Davidson
  • cheaper data plans

    i heard if you really work on it you can get your data plan down to 20.00 per phone and get your phones without paying for rebates.
    mainard1@...
  • RE: Anticipating Verizon iPhone, T-Mobile wages smartphone price war

    T-Mobile is giving away 4G phones (buy 1 get 1) for their new customers but they care less about their existing customers.... You can not even voice your opinion to customer relations. The make you write a snail mail. How is that for censorship????
    Star-Rider
  • RE: Anticipating Verizon iPhone, T-Mobile wages smartphone price war

    Helps keep the trolls at bay
    dixonrf