Apple Inc. (NASDAQ:AAPL) has started selling unlocked iPhone 6 and 6 plus in US market on Monday. What does the unlocked iPhone mean and how Apple Inc. (NASDAQ:AAPL) can benefit through this? Managing Director at Rutberg & Co Rajeev Chand talked on CNBC about Apple selling unlocked iPhone and how the company can benefit from it.
First important thing is what does this unlocked actually mean? Chand explained that unlocked iPhone separates the phone from carrier and gives the consumer an option of choosing their own operator. Generally iPhones are sold along with an operator contract in United States. The unlocked iPhone breaks this and just provides the device to consumer and leaves the consumer to decide the operator.
But, can unlocked iPhone benefit the consumer and Apple Inc. (NASDAQ:AAPL)? Chand feels that the consumer benefit is marginal, but Apple Inc. (NASDAQ:AAPL) gets a lot of freedom from operator restriction out of this move.
“I think today in the US, the benefit is somewhat marginal. Today in the US, you see operators switch from subsidies to equipment installment plans already and so the operators are giving the same prices if you would to unlocked iPhones as they are giving to the equipment installment plan. There were already unlocked iPhones available with the 5 and the 5S. You can already get an unlocked iPhone 6 and 6 plus if you go to Apple store and buy a T-Mobile plan. So I think the impact today is relatively marginal. There are two things Apple is looking for here. First thing that Apple is looking for is to give consumers the maximum choice and so they give consumers as much freedom as possible to do what they want with their devices. I think the second thing that Apple gets is overtime more freedom itself from the operators. So the constraints that operators place through their relationships and through their contracts with Apple, Apple become a little bit more free from those operator relationships through this unlocked iPhone 6 and 6 Plus,” Chand said.
Pricing wars between wireless carriers are getting big these days and question arises that if Apple Inc. (NASDAQ:AAPL)’s decision to unlock its iPhone might heat up the ongoing issues or not. Chand feels that in short term the impact is marginal mainly due to the fact that people had to opt for a contract and commit to a sim card for some time. He added that in long term if soft sim concept, where people can switch between operators at their will happens, the pricing wars between wireless carriers might heat up a lot.
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