Apple Inc. (AAPL): No…This Carrier Hasn’t Ended iPhone Subsidies

Sprint Nextel Corporation (NYSE:S)‘s prepaid Virgin Mobile subsidiary does the same thing. Virgin Mobile doesn’t currently offer the newest iPhone 5, but pricing for the older iPhone 4 and iPhone 4S models implies a $100 promotional subsidy, again for a carrier with no contracts. Unlike Leap, Sprint Nextel Corporation (NYSE:S) actually appears to be ahead of schedule with its own iPhone obligations.

To be fair, T-Mobile’s new promotional subsidy strategy will translate into dramatically lower subsidy costs, and the risks that it faces of consumers taking advantage of the system are negligible, since most will pick the installment plans. The $69 promotional subsidy sure beats the estimated $425 subsidy that postpaid carriers send to Apple.

No. 1 carrier Verizon Communications Inc. (NYSE:VZ) Wireless is even now testing the installment waters, rolling out its own payment plans in response. Big Red’s plans are for 12 months and truly full retail prices, which would result in higher monthly payments compared to T-Mobile’s 24-month discounted price plans, but the top carrier is giving it a shot.

While some may think T-Mobile’s new strategy is a disruptive threat to the subsidy model, I still believe its brave new world isn’t so brave.

The article No, T-Mobile Has Not Killed iPhone Subsidies originally appeared on Fool.com.

Fool contributor Evan Niu, CFA, owns shares of Apple and Verizon Communications Inc. (NYSE:VZ). The Motley Fool recommends Apple. The Motley Fool owns shares of Apple.

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