A week after several wireless carrier CEOs expressed a desire for greater discipline with this year's iPhone promotions, sweetened deals for the coveted Apple (AAPL) devices have started appearing. Sprint (S) and AT&T (T) have deals for free iPhones with trade-ins or added services, while Verizon (VZ) and T-Mobile (TMUS) provide discounts but have stopped short of deals for free iPhones.
"iPhone offers this fall are more restrained than they were last year," noted Jeff Moore of Wave7 Research.
Sprint kicked things off with a 50% discount on the monthly lease payment for an iPhone 8 or iPhone 8 Plus with a trade in. On Monday, Sprint improved on that with an offer for a free iPhone 8 with 64 GB of memory (list price: $699) with the trade-in of either an iPhone 7 or 7 Plus, or one of Samsung's (SSNLF) just-released models, including the Galaxy S8, S8 Plus and Galaxy Note8.
Meanwhile, AT&T made the first free iPhone offer on Friday with a buy one get one free deal for the iPhone 8 in which customers get up to $700 off the price of a higher-priced iPhone 8 with more memory or iPhone 8 Plus. Customers have to get DirecTV service for $29.99 per month, however, in addition to signing up for an additional line for $20 a month.
"The only standalone free iPhone 8 offer we've seen so far is from Sprint and even this offer is less than meets the eye, since it requires trade-in of a highly valuable device of recent vintage -- iPhone 7/Plus, Galaxy S8/Plus, or Note 8," Moore said. "[And] AT&T's free iPhone 8 offer requires a new line and AT&T TV services." AT&T makes similar offers for other smart phones, he added.
For its part, Verizon is offering $300 off an iPhone 8 or 8 Plus with the trade-in of a wide variety of phones, including the iPhone 6S, 6S Plus, 7 or 7 Plus; a Samsung Galaxy S7, Galaxy S7 Edge, Galaxy S8 or Galaxy S8 Plus; or high-end models from other manufacturers.
While T-Mobile has often initiated aggressive promotions in the past, for now, it is sticking with a $300 discount on an iPhone 8 or 8 Plus with a trade-in of an iPhone 6 or newer model, similar to Verizon's offer.
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Craig Moffett of MoffettNathanson added that trade-in values for iPhones are higher than the last cycle "making offers that sound the same on paper less costly [for the carriers] than last year's."
At a September Goldman Sachs conference in New York, most of the wireless CEOs spoke of taking a responsible approach to iPhone promotions after free trade-in offers and other deals got overheated during the last iPhone cycle, hurting profit margins.
Verizon CEO Lowell McAdam heralded the industry's "discipline" with respect to its iPhone promotions at the Goldman conference, before AT&T and Sprint announced their free iPhone deals.
T-Mobile COO Michael Sievert suggested that 2018 will not be a replay of last year, when the carrier led the way with free iPhones with trade-ins. T-Mobile's current trade-in discounts and a new offer for free Netflix (NFLX) service "are exciting promotions, but going all the way to free, that didn't look like a great thing," he said.
Sprint CEO Marcelo Claure said at the conference that "so far, things seem to be very responsible, which is good, but if one of our competitors goes very aggressive, we will do the same," he said.
Claure also tweeted that Sprint would not be undercut.
The Sprint boss may not have been throwing down the gauntlet, Moffett suggested, so much as urging restraint.
"Far from being an irrational opening salvo, Claure's pre-emptive tweet about 'matching any offer' may actually have been a well-considered message to his competitors to remember what went wrong in 2016," he wrote.