It’s been said time and time again that Tim Cook’s not an innovator like Steve Jobs. As of last summer, some tech analysts were calling for Tim Cook’s resignation as CEO because he didn’t possess the engineering nature of Apple’s former late CEO.
At the same time, however, Tim Cook is Steve Job’s handpicked successor for the Apple throne – and, whatever the reason, Steve Jobs chose him.
One reason Cook was Jobs’s choice may have something to do with his skill in retail operations. Cook’s been on the hunt to bring Apple customers back to Apple retail stores across the United States, particularly because US customers have a tendency to shop for new iPhones at their local retail stores. Most contract-minded individuals looking for a new iPhone rely on their carrier (AT&T, Verizon, T-Mobile, and Sprint), while off-contract customers who desire a T-Mobile or AT&T prepaid agreement buy their devices from either T-Mobile or AT&T retail stores. Some buy their devices from local Apple retail stores so that they can also pick up an accessory or two – but the majority of customers buy from wireless carriers.
Tim Cook wants to change this wireless carrier mindset of American iPhone customers who think of the Apple Store as the last place they’d turn to for their iPhone purchase.
With this goal in mind, one new rumor churning out of the mill suggests that Apple may offer early upgrade plans to its customers sometime soon (perhaps this Fall with the arrival of the iPhone 6).
Now, T-Mobile iPhones can be purchased at Apple stores for off-contract agreements, but T-Mobile customers must pay full price for an unlocked iPhone 5s (for example), which comes in at around $692, or get on a two-year agreement with carriers AT&T, Verizon, or Sprint. The new early upgrade plans would take the original T-Mobile price at an Apple Store (full price for an iPhone 6) and allow T-Mobile customers, with a credit check, to purchase the device for a certain amount down with a certain amount added to the customer’s T-Mobile bill each month.
As with Verizon’s EDGE plans and AT&T’s Next plans, Apple Store customers would get to sign agreements with Apple stores but get the new iPhone 6 for $0 down with a certain amount due each month. After paying off about 50% of the iPhone 6 price with 6 months of the agreement completed, iPhone 6 users would be eligible to upgrade from a 4.7-inch iPhone 6 to the 5.5-inch iPhone 6. Apple only has one iPhone announcement each year, so six-month upgrades will leave iPhone customers with nowhere to go. Of course, if an iPhone user wants to upgrade from a 16GB to a 32GB, 64GB, or 128GB model, however, the customer can make that decision as well.
With Apple’s decision to bring iPhone 6 early upgrade plans to its American retail stores, the company’s sending the message that it really wants to win its customers back in retail. Apple’s first move to win back numbers in retail stores involved granting T-Mobile customers access to iPhones that were specifically intended for T-Mobile’s network (AWS-enabled iPhones, as opposed to typical unlocked iPhones that were once incompatible with T-Mobile’s 4G LTE network and only ran on 3G wireless).
While we see this as an excellent move for a company that wants to win American iPhone owners away from their carrier and back to Apple retail, we see this as a deal only for customers who’ve purchased older iPhones (e.g., the iPhone 4S) and want to upgrade to a more current model. Someone for whom Apple’s new in-house early upgrade plans would work would be someone who isn’t a fast upgrader and is now buying the iPhone 5s – despite the imminent arrival of the iPhone 6.
Keep in mind that the new in-house early upgrade plans are in testing. Whether or not they’ll become part of the Apple Store retail experience depends on their success with the soon-to-be-announced iPhone 6.
What do you think? Are you a US iPhone customer who’d purchase the new iPhone 6 with an early upgrade plan from AT&T, Verizon, or T-Mobile in your local Apple retail store, or would you prefer the wireless carrier experience instead?