Leap Wireless International, Inc, parent cell phone service Cricket, on Thursday said it will be the first mainland U.S. telephone company, to sell the latest models of the iPhone on a pre-paid, non-contract basis.
Starting from June 22, Leap will sell the iPhone 4S, starting at $ 500 and the iPhone 4, starting at $ 400. The service will cost $ 55 per month for unlimited calls, text messages and data.
Leap Wireless International, Inc, based in San Diego, specializes in the sale no contract for services to low-income countries. Our own network is limited to certain cities. In other places, it uses the Sprint Nextel Corp. network.
Prepaid iPhone is compatible with only part of the network of Leap, and the company restricts the sale of these areas, including Houston, Austin, Texas, Portland, Oregon, Pittsburgh, Denver and Salt Lake City.
Leap said the agreement will be available in areas covering about 70 percent of its 6.2 million subscribers. Leap is the sixth largest cell phone company in the U.S., judging by the number of subscribers.
Open Mobile, which serves as Puerto Rico, became the first American company to start selling the iPhone 4 and 4S in no contract, prepaid by May 18.
When the original iPhone launched in 2007, buyers can choose to set it right on the AT & T prepaid plan, but the chance was gone with the later models. It became possible to use the imported or compromised “unlocked” phones prepaid plans as well.
Leap into the “unlimited” data services for the phone slows down once the client user racked up to 2.3 gigabytes of use since the beginning of menstrual cycle billing. This is slightly lower than the limit of either Verizon or AT & T introduces its “unlimited” plans.
Apple sells the iPhone in the average wholesale price of $ 647. The more telephone companies, to subsidize hundreds of dollars to sell it for $ 99 or $ 199. They are counting on the creation of their money back for services during the term of a two-year contract. With Leap sells the phone without a contract, it is less than the subsidized phones.
Larger carriers also sell iPhone without contract plan. But these phones are more expensive than bought your product on the plans and services costs the same as for the phone on a contract plan. A jump in the plan is cheaper than what most iPhone customers pay.
Because the iPhone is so expensive, it’s not the fact that it is a good deal for the phone company to sell it. In presentations to investors, said the jump committed $ 900 million over three years to purchase iPhones. That’s only 10 percent of the estimated cost of the phone, he said, and he does not expect iPhone sales to affect its operating profit this year.
“We would not want to do this if we did not think that this money maker,” said CEO Doug Hutcheson Leap, in an interview. But because of the high price of the phone, he does not expect more than 10 percent of customers will buy.
“This is an important addition to our portfolio, but it will not be our business,” said Hutcheson.
Leap is selling smartphones running Google Inc ‘S Android software for $ 100, and sometimes even less.
Investors initially welcomed the news, sending shares jump in premarket trading, but closed unchanged at $ 5.77.
IPhone is very popular, but its price kept it out of reach for many people who want all over the world. When asked if they could make a cheaper model to meet the demand, Apple executives said that their first priority is to make a good phone.
Missing from the line of iPhone Leap is a 3GS, older model, which is still sold to AT & T. It’s cheaper than new models, but does not work with Leap or Sprint networks.
Verizon Wireless, AT & T Inc. and Sprint, the three largest mobile phone company in the U.S., are already selling the iPhone, as well as a half-dozen smaller, regional telephone companies. Large companies that do not carry out her T-Mobile USA and MetroPCS Communications Inc., U.S. Cellular Corp., another regional carrier, said that he refused the opportunity to sell the phone because of its cost.
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