T-Mobile has recently announced that it will carry the iPhone and it will take a different approach on how to sell the devices to consumers. The company will offer the phone at $99 down payment and then require the consumer to play $20 a month for 20 months.
This announcement has been long awaited and is a departure from the traditional method that the majority of the carriers have been using. Virgin Mobile offers a plan similar to this but requires that the consumer pay the entire price of the phone upfront.
This model is a big move away from the standard of the phone industry of requiring a 2 year contract and into a new direction that emphasizes more choice in products. T-Mobile is getting rid of the contract that commits consumers to that company for 2 years and replacing it with a low-cost all included plan.
I believe that this move from T-Mobile will force the other cell phone companies into getting rid of their contracts. No consumer enjoys being locked into one phone company for 2 years. This is a move that is a breath of fresh air for consumers and a problem for other cell phone companies.
What do you think about getting rid of 2 year contracts? Is this model a viable business model?