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

Posted:
in iPhone edited January 2014
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.
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Comments

  • Reply 1 of 40
    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.
  • Reply 2 of 40
    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?
  • Reply 3 of 40
    gatorguygatorguy Posts: 23,365member
    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?.
  • Reply 4 of 40
    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)
  • Reply 5 of 40
    gatorguygatorguy Posts: 23,365member
    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.
  • Reply 6 of 40
    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.
  • Reply 7 of 40
    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.
  • Reply 8 of 40
    Meanwhile, just because we are Americans, we pay a premium. Just like we do on prescription drugs.
  • Reply 9 of 40
    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?
  • Reply 10 of 40
    steven n.steven n. Posts: 1,226member
    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.
  • Reply 11 of 40
    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).
  • Reply 12 of 40
    ko024ko024 Posts: 68member
    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....
  • Reply 13 of 40
    dasanman69dasanman69 Posts: 13,001member
    Sprint is giving them away for free as well.
  • Reply 14 of 40
    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.
  • Reply 15 of 40
    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?
  • Reply 16 of 40
    solipsismxsolipsismx Posts: 19,566member
    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.
  • Reply 17 of 40
    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?
  • Reply 18 of 40
    solipsismxsolipsismx Posts: 19,566member
    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.
  • Reply 19 of 40
    ivladivlad Posts: 742member
    Free iPhone, but heavy monitoring is also Free. China is just racing to get modernized as fast as possible, government is ordering, companies follow.
  • Reply 20 of 40
    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).
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