T-Mobile faced severe iPhone 5s constraints in Q3 2013, limiting sales at launch [u]
Resurgent wireless carrier T-Mobile is believed to have sold around 540,000 iPhones during its fiscal 2013 third quarter, a number that lags far behind the company's rivals and indicates suffocating constraints on supply of Apple's newest handsets.
T-Mobile CEO John Legere
While T-Mobile refused to provide actual sales figures for the iPhone during the carrier's quarterly conference call, Chief Marketing Officer Mike Sievert said Apple's devices accounted for about 15 percent of the 3.6 million phones sold under the T-Mobile brand, according to AllThingsD. The resulting sum is a significant step down from sales posted by Sprint and Verizon, who moved 1.4 million and 3.9 million iPhone units, respectively, in the same period.
Despite the low volume, T-Mobile deemed the launch of Apple's new flagship iPhone 5s and mid-range iPhone 5c "successful" and cited the launch, together with sales of the iPhone 5 prior to the new models' introduction, as key drivers of the carrier's nearly $1 billion year-over-year jump in handset revenues. Overall smartphone shipments made a similar leap, from 2.3 million one year ago to 5.6 million in the third quarter.
Deutsche Telekom-backed T-Mobile has made Apple devices a focal point of its turnaround strategy in recent months. The carrier began selling the iPhone 5 in June and was a launch partner for the iPad Air earlier this month, offering 200 megabytes of mobile data per month to all owners of Apple's tablets.
Update: Following the conference call, T-Mobile told AllThingsD that the carrier sold more tablets on iPad Air launch day than it did during the entire preceding quarter. As it did in relation to iPhone sales, T-Mobile declined to be more specific.
After languishing in fourth place for years and in the aftermath of a failed acquisition by AT&T, T-Mobile has been making strides against its larger rivals. The third quarter brought 1 million net new customers on a 6 percent jump in earnings to $1.3 billion.
T-Mobile CEO John Legere
While T-Mobile refused to provide actual sales figures for the iPhone during the carrier's quarterly conference call, Chief Marketing Officer Mike Sievert said Apple's devices accounted for about 15 percent of the 3.6 million phones sold under the T-Mobile brand, according to AllThingsD. The resulting sum is a significant step down from sales posted by Sprint and Verizon, who moved 1.4 million and 3.9 million iPhone units, respectively, in the same period.
Despite the low volume, T-Mobile deemed the launch of Apple's new flagship iPhone 5s and mid-range iPhone 5c "successful" and cited the launch, together with sales of the iPhone 5 prior to the new models' introduction, as key drivers of the carrier's nearly $1 billion year-over-year jump in handset revenues. Overall smartphone shipments made a similar leap, from 2.3 million one year ago to 5.6 million in the third quarter.
Deutsche Telekom-backed T-Mobile has made Apple devices a focal point of its turnaround strategy in recent months. The carrier began selling the iPhone 5 in June and was a launch partner for the iPad Air earlier this month, offering 200 megabytes of mobile data per month to all owners of Apple's tablets.
Update: Following the conference call, T-Mobile told AllThingsD that the carrier sold more tablets on iPad Air launch day than it did during the entire preceding quarter. As it did in relation to iPhone sales, T-Mobile declined to be more specific.
After languishing in fourth place for years and in the aftermath of a failed acquisition by AT&T, T-Mobile has been making strides against its larger rivals. The third quarter brought 1 million net new customers on a 6 percent jump in earnings to $1.3 billion.
Comments
I keep reading about the iPhone is way overpriced but none of that matches up to the reality that they any sell enough of them and that carriers that waited long to ink a deal with Apple are the ones that have to play catchup regaining all the customers they lost over the years. It's more likely Apple isn't charging enough, but I'm glad they aren't taking that advantage.
As stated earlier... Apple doesn't have a demand problem... it has a supply problem. They can't make enough of their high margin product.
This is likely part of the reason they likely didn't include TouchID in the iPads this year... just not enough supplier pipeline.
as for price... Apple makes it's money on the uplifts (LTE and Flash)... that the base unit price is probably right for a 'no customer surprise' plan (that's the best thing about apple... they don't fluctuate price... they let inflation and moores law drive 'value' increase at a consistent price point)
Looks like T-Mobile's BYO iPhone approach may be backfiring on them. The other carriers obviously pre-ordered a LOT more iPhones since they "subsidize" them. Unfortunately for T-M, they are relying heavily on unsubsidized iPhones, which meant they had to be individually ordered by customers.
a growth in earnings and subscribers is a terrible effect of this backfire;-)
The real reason... TMo likely didn't have the cash/credit on hand to buy enough phones for that 10 day sales blitz at the end of the quarter, but most of this was the lull of no one buying iPhone 5 phones during the quarter, waiting for the 5c/5s release... not their unsubed phones... which are plentiful as people switch or sell their 'old' phones.
It is growing earnings and subscribers - hardly a backfire. Moreover, T-Mobile orders the inventory like everybody else. Customers go in the store and pick what is on hand. It sounds to me that Apple just could not provide enough phones.
Looks like T-Mobile's BYO iPhone approach may be backfiring on them. The other carriers obviously pre-ordered a LOT more iPhones since they "subsidize" them. Unfortunately for T-M, they are relying heavily on unsubsidized iPhones, which meant they had to be individually ordered by customers.
I tend to disagree with your conclusion. The idea of "unsubsidized" phones on T-Mobile is mostly semantics. T-Mobile simply unbundled the phone cost and the service cost. You can still walk into a T-Mobile store and make a modest down payment on a phone and they will give you a loan for the balance. All the other carriers just didn't call it a loan. I haven't personally run the numbers but it would seem that over the long run this will cost you less than a similar plan with AT&T where the monthly price never goes down after the two year commitment.
Of course, with this pricing structure you can get your unlocked GSM phone wherever you want and bring it to T-Mobile and put it on their network. I have done that with several phones.
Also, remember that through at least the iPhone 4S, the 3G data frequencies in the iPhone were not compatible with the T-Mobile network. So, if you obtained an unlocked iPhone and took it to T-Mobile, they gladly let you put it on their network. In spite of not having full 3G speeds, millions of people did just that.
If I got any of these facts incorrect, I apologize. I'm eating lunch at my desk and using my frail memory for this information.
Is it me or does John Legere look just like Scott Forstall with a different haircut in that photo?
I keep reading about the iPhone is way overpriced but none of that matches up to the reality that they any sell enough of them and that carriers that waited long to ink a deal with Apple are the ones that have to play catchup regaining all the customers they lost over the years. It's more likely Apple isn't charging enough, but I'm glad they aren't taking that advantage.
I do believe Apple has a price problem. However, this isn't evident in countries (like the US) where people buy their phones on contract. Apple's problem lies in countries where people buy unlocked phones separate from the carrier they pick (and in these countries, contracts are less popular).
While this quarter T-Mo's sales clearly looked supply constrained, I would imagine going forward Apple would have a lower market share on T-Mo with its non-subsidized model, than they would in the other carriers.
It will be interesting to see how Apple tries to address the non-subsidized market going forward.
I tend to disagree with your conclusion. The idea of "unsubsidized" phones on T-Mobile is mostly semantics. T-Mobile simply unbundled the phone cost and the service cost. You can still walk into a T-Mobile store and make a modest down payment on a phone and they will give you a loan for the balance. All the other carriers just didn't call it a loan. I haven't personally run the numbers but it would seem that over the long run this will cost you less than a similar plan with AT&T where the monthly price never goes down after the two year commitment.
Of course, with this pricing structure you can get your unlocked GSM phone wherever you want and bring it to T-Mobile and put it on their network. I have done that with several phones.
Also, remember that through at least the iPhone 4S, the 3G data frequencies in the iPhone were not compatible with the T-Mobile network. So, if you obtained an unlocked iPhone and took it to T-Mobile, they gladly let you put it on their network. In spite of not having full 3G speeds, millions of people did just that.
If I got any of these facts incorrect, I apologize. I'm eating lunch at my desk and using my frail memory for this information.
Your facts are correct. However, the difference between T-Mo and the remaining carriers is that with T-Mobile, if you bring your own phone, you get a lower rate plan. With other carriers, there is no advantage to bringing your own phone because you will be charged the same rates.
Your facts are correct. However, the difference between T-Mo and the remaining carriers is that with T-Mobile, if you bring your own phone, you get a lower rate plan. With other carriers, there is no advantage to bringing your own phone because you will be charged the same rates.
Thanks. You are right and I apologize for leaving that part out. I have investigated the rate plans with T-Mobile and they have some very competitive rates for their service. And, remember that now they have international data at no cost in many places. Sorry if I sound like a T-Mobile commercial, but my wife and I are considering taking three iPhones to T-Mobile because of the rate plans and international data.
Thanks. You are right and I apologize for leaving that part out. I have investigated the rate plans with T-Mobile and they have some very competitive rates for their service. And, remember that now they have international data at no cost in many places. Sorry if I sound like a T-Mobile commercial, but my wife and I are considering taking three iPhones to T-Mobile because of the rate plans and international data.
Hah...If you think your comment is a T-Mob commercial, you should hear me talking sometime!
Got about a week to go on my AT&T contract, and then moving to TMob with 4 iPhones, which will (assuming no hidden costs) save me about $80/mo for better availability. Still concerned about TMob's coverage though.
I've been waiting since launch day for a Silver 64GB 5s for T-mobile, and there have been exactly 5 reported in the wild locally since launch day. 3 were received and sold by my local Apple Store, and 2 at a local T-Mobile shop.
I call or visit my local Apple Store daily, and they have had only ONE T-Mobile handset above 16GB, in any color, since a few days after launch. The 3 T-Mobile shops in my area have had no 5s handsets in any color above 16GB either.
So either Apple just isn't prioritizing T-Mobile (and yet, according to the good people at my Apple Store, there is a BIG queue waiting for 32GB or 64GB T-Mobile handsets in silver and gold) or they are just in seriously short supply.
Well, short supply is all relative if the competition can sell millions of them while T-Mobile customers languish without stock EVEN from Apple Stores themselves...
They finally got ONE space-grey 32GB into my local Apple Store, so I went ahead and bought it. Implicit in that arrangement is that I can swap this one out for a 32G or 64GB Silver model if one comes in during the next month.
One hopes it's sooner than later...
I think for T-Mobile, the supply constraints bit them two ways. First, I suspect that T-Mobile does not have a huge contractual sales commitment (for example, like Sprint is rumored to have), so that might place them further down on the allotments at launch. Either way, it seems obvious that T-Mobile stores did not receive nearly as many phones as the other major telcos did.
Also, the "T-Mobile" iPhones sold through Apple also happen to be the only models marketed as factory unlocked. Anyone wanting to carry their phones over to another carrier, or resell them on the grey market, would likely choose the "T-Mobile" model, even if they have no intention of using it on T-Mobile's network. At launch, I recall the unlocked T-Mobile models selling out first, and even now, they remain the most supply-constrained iPhone models. People wanting to an iPhone 5s over to T-Mobile would have just as hard a time finding one through Apple.
Quote:
Hah...If you think your comment is a T-Mob commercial, you should hear me talking sometime!
Got about a week to go on my AT&T contract, and then moving to TMob with 4 iPhones, which will (assuming no hidden costs) save me about $80/mo for better availability. Still concerned about TMob's coverage though.
The coverage is T-Mobile's only real downside. For the most part, the coverage in urban areas is good. It's only when you venture into rural areas that the coverage becomes spotty. But, for a contract-free $30 prepaid plan (100 minutes, unlimited text and data [5 GB LTE/4G]) that has exactly what I want, it's a tradeoff I'm willing to live with.
The telcos' obtuse game of contracts, subsidies, and ridiculously priced data tiers kept me out of the smartphone market until more transparent options that better matched my needs came along. Bottomline, I did not want a high monthly rate, a contract, or a lot of voice minutes. But, I did want a generous high speed data allotment. None of the major telcos offered anything matching this.
Only late last year when T-Mobile began actively pitching their BYOP prepaid plans and Apple began directly selling unlocked phones compatible with T-Mobile's network did I finally get off the fence and start seriously looking at smartphones. While other MVNOs like Virgin Mobile, Solavei, Boost, and Straight Talk had bits and pieces of what I wanted, T-Mobile became the more attractive option when they added their no-contract postpaid plans and ramped up their LTE network.
If T-Mobile plays it right and keeps things transparent and above board, they have a lot of upside as people grow weary of the gamesmanship played with contracts and subsidized plans. T-Mobile's main challenge is educating the public that over the long-haul, that "$649" iPhone actually costs less than a "$199" iPhone.
I'm not a fan of T-Mobile for reasons of coverage but I do respect there more transparent approach to selling devices. I may even get my Retina iPad Mini through them, but that's more or less for the free 200MB data.
I do see your point about other countries but Apple has had that issue with the Mac, even in the US, and they still have a very expensive entry point for Mac notebooks. It's gotten better over the years but it's still very higher which limits their Mac sales, and they don't seem to mind being the most (and nearly only) profitable sector of the PC vendor market. And this is an area that they really could use more people on their OS X to bout the Mac ecosystem, whereas with iOS it's very solid even without lower price points.
I've been waiting since launch day for a Silver 64GB 5s for T-mobile, and there have been exactly 5 reported in the wild locally since launch day. 3 were received and sold by my local Apple Store, and 2 at a local T-Mobile shop.
I call or visit my local Apple Store daily, and they have had only ONE T-Mobile handset above 16GB, in any color, since a few days after launch. The 3 T-Mobile shops in my area have had no 5s handsets in any color above 16GB either.
So either Apple just isn't prioritizing T-Mobile (and yet, according to the good people at my Apple Store, there is a BIG queue waiting for 32GB or 64GB T-Mobile handsets in silver and gold) or they are just in seriously short supply.
As mentioned above, the T-Mobile iPhones are the only ones that Apple explicitly markets as unlocked. So, you not only have T-Mobile customers looking for those models, but also MVNO subscribers and grey market resellers. The AT&T and Verizon models are also available unlocked, but only IF you buy from Apple and IF you pay full price for it. If a T-Mobile model was purchased from Apple, then you know for sure that it is unlocked, and I assume that assurance is worth something with resell/grey market purchasers.
I ordered a 32GB space grey T-Mobile model right when the website came online on launch day. (Received it a week later) About half an hour later, the wait time on the T-Mobile models was the first to move from "1-3 business days" to "5-7 business days." And even now, if you check apple-tracker.com, the T-Mobile models remain the most difficult ones to find.
These numbers reinforce that their strategy is paying off. Those are terrific new customer acquisition numbers considering their base and overall size. You can't expect Verizon / AT&T numbers from them. That's just unrealistic.
Hah...If you think your comment is a T-Mob commercial, you should hear me talking sometime!
Got about a week to go on my AT&T contract, and then moving to TMob with 4 iPhones, which will (assuming no hidden costs) save me about $80/mo for better availability. Still concerned about TMob's coverage though.
I got off ATT contract last month after 6 years with them. I gave out my unlimited grandfathered iPhone data plan but I can't be more happy. The coverage isn't as good as ATT but it is sufficient enough. Phonecalls connectivity is about the same as ATT, data is sufficient in towns, not as much out of town but I don't need it usually when driving. I have Tmobile tower about 1/4 mile from my home so I have 5 bars LTE @ home but most of the times I use wifi. Pandora is caching music forward to cover the spots without 3g connectivity.
My bill is the same as I had before with ATT but I have 1 extra iPhone & unlimited messages & calling (I had 600 minutes & pay per message with ATT). After I pay off the phones my bill will be about 60% of what I paid ATT. T-Mobile plans are very reasonable and it's a shame they did not have iPhone before. International data is just a cherry on top, I paid over $100 for roaming when last time in E.U.