iPhone price wars are back as carriers compete for 5G customers - CNBC

carriers are actively competing for subscribers by discounting the new iPhone, which goes on sale next week, hoping to lock customers in for years on their wireless service.

For example, AT&T customers can get as much as $800 off an iPhone 12, nearly covering the entire cost of the device.

For carriers, iPhone promotions represents an opportunity to shore up existing subscribers and potentially gain new ones, hoping to cover the cost of the devices over multi-year payment schedules.

have two things in common: Customers have to trade in an old device with some value — a phone from the last few years that isn't busted — and they have to commit to monthly payments.

Ten years ago, the price for a new iPhone was often listed at $199, because that's how much the device cost when users bought it from a carrier with a two-year contract, usually with a hefty early cancellation fee.

In the years since, carriers have effectively recreated the same customer lock-in using device payment plans — customers don't have to pay hundreds of dollars up front for a new iPhone or Samsung Galaxy, but they must commit to paying between $30 and $50 per month for at least two years with a lump sum payment if they cancel early.

Carriers found ways to entice new customers with promotions tied to their device upgrade plans, often by overvaluing a trade-in device.

Now, with 5G hyped as a major growth cycle for the telecommunications industry, the three carriers are working to steal customers from the their rivals or lock them in for the next two years using the 5G iPhone.

In the meantime, Apple has boosted its own device upgrade installment plans in several different ways, although it does not offer subsidies like the carriers.