U.S. provider T-Mobile has announced that it will offer Apple’s iPad Air and iPad mini beginning on 1 November and iPad mini with Retina display later in the month, all with Wi-Fi + Cellular service. The 16 GB models of the tablets will be available for qualified customers at US $0 down, with 24 equal monthly payments of US $26.25 for the iPad Air, US $22.08 for the iPad Mini with Retina display and US $17.91 for the iPad Mini. The 32 GB and 64 GB models will be available for the same monthly payments as the corresponding 16 GB models, but with US $99.99 down for the 32 GB and $199.99 down for the 64 GB. In addition, every T-Mobile iPad user will receive 200 MB of free LTE data each month as long as they own the device.
We think T-Mobile’s generous terms should give some much-needed help to Apple’s tablet business, which has been suffering lately due to competition from Android devices such as Google’s Nexus tablets. The fact that the Android operating system is free to device manufacturers means the tablets that run it can be priced much lower than the iPads, which are built around Apple’s proprietary iOS—US $629 for the iPad Air 16GB versus $349 for the Google Nexus 7, for example. Undoubtedly, US $26.25 a month with zero down is far more attractive than US $629, and such a pricing scheme is highly likely to increase iPad purchases. As it happens, T-Mobile is offering monthly payment plans for all the tablets it sells, and the Nexus 7’s monthly fee is only US $16. Still, a US $10 per month difference is far less decisive than a US $280 difference in overall price, at least in terms of cash flow and buyer psychology. Therefore, we anticipate that T-Mobile’s plan will benefit Apple in particular.
But what about the mobile operator? With this persuasive offer, T-Mobile ought to be able to significantly increase the ranks of its tablet subscribers, iPad and otherwise. And while the free data offer of 200 MB is not necessarily very generous, we feel it constitutes a legitimate sweetener to any deal (in fact, T-Mobile is offering it via SIM card to anyone who owns a tablet and visits their retail outlets, whether or not they are T-Mobile customers). It may also serve as a revenue driver by luring in subscribers who then go over the allowance and end up paying for more data.