T-Mobile Drops iPhone 5C Price Before September 20 Release (AAPL, TMUS)
T-Mobile (NYSE: TMUS) will sell the iPhone 5C at a discount when it goes on sale this Friday, September 20.
According to The Wall Street Journal, the carrier will offer the 16GB iPhone 5C for $528 through its financing plan -- $21 less than the MSRP.
These pre-launch discounts are fairly unusual for Cupertino, California-based Apple (NASDAQ: AAPL). While the company does not seem to employ a strict pricing policy that prevents retailers from heavily discounting its items, it is rare that an Apple-made device is discounted before it is even released.
When Wal-Mart announced that it had planned to sell the iPhone 5C for $20 less, it was viewed as a competitive measure designed to lure the masses away from Best Buy (NYSE: BBY), Target (NYSE: TGT) and Apple's own retail stores. Now that T-Mobile has done the same, investors might begin to wonder what's going on with Apple's lower-cost iPhone.
It could simply be that the iPhone 5C is so cheap to manufacture that Apple is able to sell it at an unusually low price. If retailers are paying less, they can afford to charge a better price. They may not want to (hence other retailers sticking to the MSRP), but they would have some leeway to do so.
Wal-Mart and T-Mobile may have also reduced the price because it assumes that the demand for the iPhone 5C -- which is more or less a plastic version of last year's iPhone 5 -- will be lower than the demand for the iPhone 5S.
Wal-Mart lowered the price of the iPhone 5S as well, reducing its contract MSRP by $10. T-Mobile has yet to do the same.
Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at 248-636-1322 or louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ
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