T MOBILE US INC (TMUS), AT&T Inc. (T), Verizon Communications Inc. (VZ) – The Next Battle in the Smartphone Wars: Phone Subsidies

Perhaps an obvious push back against the “waiting to upgrade” argument is to ask why anyone would. Maybe the most obvious group is Apple Inc. (NASDAQ:AAPL) iPhone users. Given the fact that Apple Inc. (NASDAQ:AAPL) continues to keep its flagship device on an annual product cycle, if you are an iPhone user, there is no reason to upgrade more frequently than once a year. In the short term, Apple Inc. (NASDAQ:AAPL) could actually benefit from the rollout of these plans, as customers might opt for an iPhone 5 today, knowing they can upgrade to an iPhone 5S in six months on T MOBILE US INC (NYSE:TMUS) or Verizon Communications Inc. (NYSE:VZ); but once you get on the annual cycle, there will be little reason to buy a new iPhone more than once per year.

And the winner is…
While each of the plans have different benefits and drawbacks, the wireless industry as a whole is the winner. The easiest way to achieve growth in an industry is to get customers to pay more for what they are already buying. Particularly in the U.S., we have all become so reliant on our smartphones, that it’s unlikely consumers will fail to accept the ultimate end of subsidies. The industry is very astutely focusing attention on upgrading more quickly to counteract the natural inclination to upgrade more slowly if the cost of devices is rising. It will likely take several quarters to truly gage the impact of this shift, but expect to see a benefit to the carriers that should be reflected in their respective stocks.

The article The Next Battle in the Smartphone Wars: Phone Subsidies originally appeared on Fool.com and is written by Doug Ehrman.

Fool contributor Doug Ehrman has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple.

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