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China Unicom customers can get Apple's iPhone 4S free with contract

post #1 of 41
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Apple's carrier partner in China is offering an aggressive promotion in which customers can get a brand new iPhone 4S for free if they sign a multi-year service contract.

Customers can pay as little as 286 yuan, or $45 U.S. per month, for the plan to get a free iPhone 4S, Bloomberg reported on Friday. The promotion will begin Friday, Jan. 13, which is the day the iPhone 4S will go on sale in mainland China and 21 other countries.

China Unicom subscribers can get a free 32-gigabyte iPhone 4S with a three-year service contract. And the 16GB model is available free for those who agree to a two-year contract.

The iPhone has already proven to be costly for China Unicom, as the carrier saw its 3G-related cost increase nearly fourfold in the first half of 2011. Some analysts believe the carrier's heavy iPhone 4S subsidy will only accelerate those costs.

China Unicom's 3G business has been a money-losing operation for the carrier through the first six months of 2011. Subsidies of smartphones reportedly accounted for 45 percent of the 3G service costs.



The subsidies being offered by China Unicom are much more aggressive than other carriers across the world. For example, in the U.S., customers on AT&T, Sprint and Verizon can get a 16GB iPhone 4S for $199 with a new two-year plan, while the 32GB model is $299 and 64GB is $399.

Customers in the U.S. and some other countries to have an option for a free handset in the form of the iPhone 3GS, which was first released in 2009. That promotion started with the release of the iPhone 4S in October.
post #2 of 41
Oh gawd... some tool is going to post that Apple has hit the bottom of the barrel because it has to give its phones away in China.
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post #3 of 41
In Canada on a minimum $55 plan for 3 years, you can get a 16 GB 4S for $159 plus a $35 activation fee on the Rogers network with a hardware upgrade on an existing plan.

What do they get with that $45 plan?
post #4 of 41
Quote:
Originally Posted by island hermit View Post

Oh gawd... some tool is going to post that Apple has hit the bottom of the barrel because it has to give its phones away in China.

My question would be why are they doing that?.
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post #5 of 41
You can get an iPhone 4S 16GB free for around £45 per month (2 year contract)
with the minutes ranging from 1200 (O2/Orange/T-Mobile) to around 3000 (Tesco)

£45 = $69 (but remember UK as 20% VAT, so before VAT it's $57.80)

[additional information]

Sim Free (ie if you purchased the phone) you would pay £26 for the same minutes from O2/Orange/T-Mobile (and could get more minutes from some other suppliers), For example Tesco and Giff Gaff both use the O2 network but offer better minutes/data

for a 2 year contract the difference between Supplied and Sim Free can be £450, given apple sell the phone for £499, the subsidy is on the order of £50 over 2 years (which the carriers probably make back because of other limitations on tarrifs)

For reference Giff Gaff will give 1500 minutes for £25, which means the difference is £480 and you get more minutes (and no contract)

To Clarify, just using O2/T-Mobile/Orange/Vodafone (on contract) against Giff Gaff (no contract) as an example

on contract 24 months x £45 = £1080 (no handset cost)
no contract 24 months x £25 = £600 + £499 handset = £1099 (but no contract and more minutes)
post #6 of 41
Quote:
Originally Posted by PJWilkin View Post

You can get an iPhone 4S 16GB free for around £45 per month (2 year contract)
with the minutes ranging from 1200 (O2/Orange/T-Mobile) to around 3000 (Tesco)

£45 = $69 (but remember UK as 20% VAT, so before VAT it's $57.80)

Thanks, didn't know that. So the China Telecom "free iPhone 4S deal" isn't all that unique then.
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post #7 of 41
Quote:
Originally Posted by PJWilkin View Post

You can get an iPhone 4S 16GB free for around £45 per month (2 year contract)
with the minutes ranging from 1200 (O2/Orange/T-Mobile) to around 3000 (Tesco)

£45 = $69 (but remember UK as 20% VAT, so before VAT it's $57.80)

Yep, same in Netherlands (and elsewhere in Europe I am sure). Have always been able to find the current/latest iPhone free with contract here in Europe. This isn't new or special to many of us.
post #8 of 41
Quote:
Originally Posted by Gatorguy View Post

My question would be why are they doing that?.

Don't know why they do it in China. But in Europe, where it is also offered Free, it is likely because there is a lot of competition between a greater number of Carriers, including supermarkets like Tescos.

Outside the US, it seems as though there is more natural competition between Carriers, with regulation in favor of the consumer. New, small carriers are able to use the existing infrasturcture.
post #9 of 41
Meanwhile, just because we are Americans, we pay a premium. Just like we do on prescription drugs.
post #10 of 41
Just as Apple sells record iPhones in the quarter leading up to the Christmas shopping season, they get a "second Christmas" when Unicom starts selling the 4S in China.

Wonder what impact this will have on their next quarter earnings call?

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post #11 of 41
Quote:
Originally Posted by Gatorguy View Post

My question would be why are they doing that?.

My guess is to maintain their foothold in Asia. The current web Page view stats for China are:

iOS \t62.95%
Android \t18.69%
Symbian\t16.72%
Java ME \t0.61%
Other \tThe rest.

Steve Jobs made comments about knowing the right time to go between profit share and market share and there are times when you want to go for market share and times when profit share is good.
post #12 of 41
Quote:
Originally Posted by EricTheHalfBee View Post

Just as Apple sells record iPhones in the quarter leading up to the Christmas shopping season, they get a "second Christmas" when Unicom starts selling the 4S in China.

Wonder what impact this will have on their next quarter earnings call?

Probably substantial if the recent trend continues.

In 2009, China was 2% of Apple's total revenue. A year later it was 12%. The last reported quarter, that figure had jumped to 16%, making China the second largest top revenue market for Apple (behind the United States).
post #13 of 41
Quote:
Originally Posted by Gatorguy View Post

My question would be why are they doing that?.

Prolly because they know china mobile is getting the 4G iPhone in the summer, therefore they need to lock in customers NOW....
post #14 of 41
Sprint is giving them away for free as well.
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post #15 of 41
Quote:
Originally Posted by ko024 View Post

Prolly because the know china mobile is getting the 4G iPhone in the summer, therefore they need to lock in customers NOW....

+1 After multiple attempts by others to stumble around the subject in this thread, someone gets it right.
post #16 of 41
As others have said, in the UK all the carriers offer the iPhone 4S for free on a 24 month contract. You've been able to get a free iPhone since at least 2009 (when O2 lost exclusivity). So why is this newsworthy?
post #17 of 41
Quote:
Originally Posted by ko024 View Post

Prolly because they know china mobile is getting the 4G iPhone in the summer, therefore they need to lock in customers NOW....

That is my assessment, also. AT&T did a similar thing in 2010 that indicated Verizon would be getting the iPhone shortly.

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post #18 of 41
Quote:
Originally Posted by SolipsismX View Post

That is my assessment, also. AT&T did a similar thing in 2010 that indicated Verizon would be getting the iPhone shortly.

Isn't it normal to get phones for free in the US? Perhaps it's just what customers expect in China like in Europe?
post #19 of 41
Quote:
Originally Posted by markbriton View Post

Isn't it normal to get phones for free in the US? Perhaps it's just what customers expect in China like in Europe?

Depends on the phone. Cheap and old phones can be had for free. Cheap dumb phones that are subsidized for under $100 and havd no data plans? Sure. Smartphones with required plans subsidized by $200 (or up $450 in the case of the iPhone 3GS)? Sure. If you go for a high end smartphone you're usually going to pay a couple hundred or more out of pocket.

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post #20 of 41
Free iPhone, but heavy monitoring is also Free. China is just racing to get modernized as fast as possible, government is ordering, companies follow.
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post #21 of 41
Quote:
Originally Posted by Gatorguy View Post

My question would be why are they doing that?.

Quite possibly to pre-empt switching to other carriers.

The only really important issue is whether this affects Apple's revenue in any way. In answer: (i) I would guess not; (ii) If (i) was wrong, at least can easily infer from ASPs reported in Apple's next 10Q (unlike other smartphone manufacturers who do not report theirs).
post #22 of 41
Everyone realizes that Apple still gets paid.... right?

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post #23 of 41
Quote:
Originally Posted by island hermit View Post

Oh gawd... some tool is going to post that Apple has hit the bottom of the barrel because it has to give its phones away in China.

They can afford to, the shipping costs are minimal

(and it isn't Apple giving the phones away, it's the carrier)
post #24 of 41
Quote:
Originally Posted by Gatorguy View Post

My question would be why are they doing that?.

They are a 20% market share company, wanting to get bigger. This is an easy way to win subscribers. Since you have to deposit $900 anyway, it is more like you get it free with 6 months service for $900....
post #25 of 41
Quote:
Originally Posted by OriginalG View Post

What do they get with that $45 plan?

The ¥286 plan includes 950 MB of data, 900 domestic minutes, 40 M messages, and 50 T messages. Incoming voice and messages are free.

Details on all the plans at http://shop.10010.com/packagenumber/...geSeq=99005044.
post #26 of 41
Quote:
Originally Posted by AppleZilla View Post

Meanwhile, just because we are Americans, we pay a premium. Just like we do on prescription drugs.

The USA won't try to stop you if you leave, you know.
post #27 of 41
Quote:
Originally Posted by SpamSandwich View Post

Everyone realizes that Apple still gets paid.... right?

No, they (everybody) dont. They think Apple is giving away iPhones on contract, not China Unicom. People are dumb though, so no surprise.
post #28 of 41
Quote:
Originally Posted by cameronj View Post

The USA won't try to stop you if you leave, you know.

In fact, give them a fake name of someone in another country and they'll send you there free of charge no relevant questions asked.

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post #29 of 41
Quote:
Originally Posted by AppleInsider View Post

The subsidies being offered by China Unicom are much more aggressive than other carriers across the world. For example, in the U.S., customers on AT&T, Sprint and Verizon can get a 16GB iPhone 4S for $199 with a new two-year plan, while the 32GB model is $299 and 64GB is $399.

Customers in the U.S. and some other countries to have an option for a free handset in the form of the iPhone 3GS, which was first released in 2009. That promotion started with the release of the iPhone 4S in October.

Okay, so I know it sounds aggressive, but I know that here in Japan we've been getting free phones for a while. I got my IP4 here for free with a two year contract. It may be more aggressive than the US, but I doubt it's really THAT irregular...
post #30 of 41
Quote:
Originally Posted by cameronj View Post

The USA won't try to stop you if you leave, you know.

They won't stop you but they'll happily tax the shit out of you wherever you live regardless of where you spend/save that money unless you give up coming back. Uncle Sam my ****
post #31 of 41
Here in Japan,

I was expecting to be offered a "free" iPhone 3GS when renewing a SoftBank account, but they don't even stock them. Their basic model is an iPhone 4, but they offer a FREE 16GB iPhone 4S to existing customers who renew their contracts.

So basically, it is not Apple who is making the decisions, it is the local carrier, for business reasons.

Incidentally, they have stocks in black but the white model is sold out everywhere.
post #32 of 41
This article begs the question: why haven't American carriers figured out they can give away every iPhone for "free" simply by rolling the upfront fee into the monthly charge (which can simply be different for each model)?

The only price that should matter is the total cost of ownership, so if the upfront price is a barrier to many customers why not just eliminate it altogether?
post #33 of 41
Quote:
Originally Posted by Dunks View Post

This article begs the question: why haven't American carriers figured out they can give away every iPhone for "free" simply by rolling the upfront fee into the monthly charge (which can simply be different for each model)?

The only price that should matter is the total cost of ownership, so if the upfront price is a barrier to many customers why not just eliminate it altogether?

Well said. This is just a Bloomberg article that's been slavishly copied without any thought.
post #34 of 41
Quote:
Originally Posted by Dunks View Post

The only price that should matter is the total cost of ownership, so if the upfront price is a barrier to many customers why not just eliminate it altogether?

Because the only price that matters is the cost of ownership, the up front cost doesn't matter to people at all.

The cost of ownership is the reason we don't have three iPhones in our family. We're fine with paying $200 for phones.

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post #35 of 41
Quote:
Originally Posted by SolipsismX View Post

Depends on the phone. Cheap and old phones can be had for free. Cheap dumb phones that are subsidized for under $100 and havd no data plans? Sure. Smartphones with required plans subsidized by $200 (or up $450 in the case of the iPhone 3GS)? Sure. If you go for a high end smartphone you're usually going to pay a couple hundred or more out of pocket.

Interesting. I also read that US carriers charge to receive calls. I suppose the sheer size of the US means the infrastructure is much more expensive with less densely populated areas needing coverage, pushing costs up. Roaming outside the UK to other countries costs a fortune (for example I just returned from Germany where I'm charged 36p per minute and £1 per 3 meg of data on top of my contract. Berlin is only around 600 miles from London, Paris is only about 200 miles away). Also worth noting is that the UK doesn't currently have any LTE network, just 3G, although O2 are testing it in London (incidentally, since LTE networks barely exist outside the US, this is likely to be one of the reasons why Apple are yet to make a 4G iPhone until it's more widely adopted).
post #36 of 41
Quote:
Originally Posted by markbriton View Post

Interesting. I also read that US carriers charge to receive calls. I suppose the sheer size of the US means the infrastructure is much more expensive with less densely populated areas needing coverage, pushing costs up. Roaming outside the UK to other countries costs a fortune (for example I just returned from Germany where I'm charged 36p per minute and £1 per 3 meg of data on top of my contract. Berlin is only around 600 miles from London, Paris is only about 200 miles away). Also worth noting is that the UK doesn't currently have any LTE network, just 3G, although O2 are testing it in London (incidentally, since LTE networks barely exist outside the US, this is likely to be one of the reasons why Apple are yet to make a 4G iPhone until it's more widely adopted).

I think the US offers more minutes on average for the basic plans but they do charge for incoming calls.... and incoming texts. You can ignore a call you don't recognize but you can't screen SMS spam. It's quite ridiculous.

Each country seems to have their pros and cons. Australia seems to offer great coverage at low rates with a low average population like the US but with densely populated areas. Perhaps the costs comes with you have to accommodate for service along all the highways and roads where businesses and homes typically aren't found. In this regard the US seems to be a much more complex and larger mesh network. In any case, it could be worse and it could be better in every market I've used a cell phone.

I would expect plenty of LTE devices at CES. I think this is the year for LTE to be power efficient enough to be viable. I'm hoping for something around the iPhone 3G back in 2008 but that world mode 2G/3G chip is in itself a not the most efficient way to go, so who knows what they'll do.

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post #37 of 41
Quote:
Originally Posted by Bouncerman View Post

They won't stop you but they'll happily tax the shit out of you wherever you live regardless of where you spend/save that money unless you give up coming back. Uncle Sam my ****

Again, the process of removing Uncle Sam from your life is exceedingly easy, and since it's so terrible, I don't see why you'd want to come back? Not that you have to - renouncing citizenship is easy and does not prevent you from returning as a guest in the future. http://travel.state.gov/law/citizens...nship_776.html

If it's so terrible here, and if you're not a total societal leech, you should have no trouble finding another country to take you in. Goodbye!
post #38 of 41
Quote:
Originally Posted by Dunks View Post

This article begs the question: why haven't American carriers figured out they can give away every iPhone for "free" simply by rolling the upfront fee into the monthly charge (which can simply be different for each model)?

The only price that should matter is the total cost of ownership, so if the upfront price is a barrier to many customers why not just eliminate it altogether?

I imagine they have figured it out, but there are probably two things preventing it from happening.

First, it's entirely possible (in fact probable) that Apple has contractual agreements disallowing them from selling the iPhone for less than Apple's list price. Apple does that to maintain the premium image of the phone.

Second, the carriers in the states don't want to do anything to suggest that your contract subsidizes the phone, even if it makes them more money. Because from there it's a short logical leap to ask "if they charge me more for more subsidy, shouldn't they charge me less if I bring my own phone?" Which is something they are TOTALLY unwilling to do. Sadly.
post #39 of 41
Quote:
Originally Posted by markbriton View Post

As others have said, in the UK all the carriers offer the iPhone 4S for free on a 24 month contract. You've been able to get a free iPhone since at least 2009 (when O2 lost exclusivity). So why is this newsworthy?

Because it's China, where this is not the norm for iPhones. This should cause quite the rush, even though there was high demand already. A rush in China just might be something to behold, and it is definitely newsworthy.

I hope Apple kept that manufacturing line cranking at full capacity after Xmas.

Thompson
post #40 of 41
Quote:
Originally Posted by aaarrrgggh View Post

... Since you have to deposit $900 anyway, it is more like you get it free with 6 months service for $900....

This.

All "Free Phone" plans with China Unicom involve a giant deposit up front, in excess of the total cost over the life of the plan. They then issue you a "refund" every month.

See: http://iphone.10010.com/ for the plan details.

So you put down 6999 RMB (about $1100 USD), and then if you select the 286 RMB/month plan with the 3-year term, they then give you back 194RMB each month (guessing it's not cash... but not sure).

So 286-194 = 92/month * 36 mo = 3312RMB ($USD 524) for a free phone and 36 months of service. It's not a bad plan, if you have 6999RMB kicking around and don't plan on upgrading for 3 years.
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