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Apple Telecom

When iPhones Seem Pricier

Today’s Apple event will show off a new iPhone offering lots of glitzy new features, sure to attract the usual deluge of media attention. But anyone trying to figure out how the iPhone will sell in the future should focus less on these features and more on cellular carriers’ pricing.

In the past two years, the major carriers have moved away from subsidizing smartphones—selling devices for which they paid $700 to their customers for $200 or $300. To wean customers off this arrangement, carriers are offering deals that in some ways are even better than in the past: Consumers who don’t want to pay the full price can lease a device or pay for it in monthly installments over a couple of years without a big upfront cost.

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By separating clearly the cost of the price from their wireless service plans, carriers will make their customers more sensitive about the phone price.