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TheStreet Open House

T-Mobile Gives Apple Another Big Win

NEW YORK ( TheStreet) -- Almost lost amid the hubbub concerning T-Mobile's "Simple Choice" plan is that it's a big win for Apple (AAPL).

What the Los Angeles Times headlined as the dropping of contract plans and the end of phone subsidies is really nothing of the sort.

You still have to sign a contract. You still have to get a credit check. You still pay a monthly service fee, with an additional fee for each phone line you use.

What's changed is your legal agreement is tied to the phone, rather than the service. Cancel the service and you'll pay for the phone, with the cost of the phone added explicitly to your monthly bill. Pay off the phone and you can take it with you. This is a 24-month payment plan, so the contract length has not changed.


The big deal here, as the T-Mobile press release printed at 9to5mac.com makes clear, is how this is all tied to the iPhone, specifically iPhone 4, iPhone 4S and iPhone 5 units.

In the plan all these phones are being priced at $20/month, plus a down payment similar to what other carriers charge. The T-Mobile plan is designed to get buyers over the iPhone's biggest problem, its high cost relative to Android models.

The service prices are also no threat to AT&T (T), Verizon Wireless or Sprint (S) , the contract lengths are identical. It's just a slight tweak similar to plans already available in Canada, as TechCrunch notes.

Again, it's all built around the iPhone. T-Mobile is now willing to give you an iPhone at near its cost in order to get your business. All U.S. carriers now carry the Apple line.

Apple stock has yet to get any credit for the win. After popping to near $470/share, Apple stock opened Thursday at about $450. Apple is also not getting any stock market love over the iPhone's increased market share, which, according to StatCounter, has been growing steadily since December and now stands at 25%, while Android share has leveled off.

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