Apple's iPhone 8 turns into bargaining chip in limited-time carrier promotion
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TORONTO — Rogers Communications is using one of Apple's newest smartphones, the iPhone 8, as a bargaining chip as it seeks to get customers to sign up for select service plans over the busy holiday shopping period.
In a limited-time offer announced Thursday, Rogers (TSX:RCI.B) began advertising an iPhone 8 with 64 megabytes of memory for $0 if customers sign up for a two-year plan that costs at least $2,280 before taxes over the contract
That amounts to about $95 a month for a plan that includes 300 local voice minutes, one gigabyte of regular data and two bonus gigs. Additional features would push the monthly fee higher.
While it's normal for carriers to offer older phones for little or no money to entice customers, it's less common for a newer phone like the iPhone 8 to be available for $0.
"I think it's a change in market dynamics," IDC Canada mobile products researcher Manish Nargas said Thursday.
He pointed to a revised federal code of conduct, which went into effect Dec. 1, that requires carriers to sell unlocked mobile phones — making it easier for consumers to switch to another network.
"Now when you've got into a situation where everything's unlocked and everybody's on equal playing ground, you have to create new ways to resonate with the consumer," Nargas said in an interview.
"You might be paying $0 up front, which is great for the consumer, but it does tack on a sizable amount to your monthly bills."
Nargas noted that, last weekend, other carriers followed Rogers after it and its Fido brand began offering $60 per month big-data plans until Monday or Tuesday — an apparent answer to a Freedom plan announced a few weeks ago.
As of Thursday afternoon, Telus and Bell hadn't matched the Rogers iPhone 8 temporary price cut. They were promoting $0 offers for Samsung Galaxy S8 and S7 smartphones and some older Apple phones.
Rogers hasn't commented on its most recent pricing moves, but its executives have said the company competes with Freedom on price but has advantages in terms of network, distribution system and customer care.
"Freedom still has a ways to go in terms of having a network that competes with us and with the other two large players," Rogers chief financial officer Anthony Staffieri told an industry conference on Dec. 5.
Shaw's Freedom (TSX:SJR.B) — which has its network primarily in Ontario, Alberta and British Columbia — wasn't able to carry the Apple 8s and newer iPhone X until this month.
By contrast, Apple's iPhone 8 and iPhone 8 plus have been available from Rogers and the other major Canadian carriers since September and they've been selling the iPhone X more than a month longer than Freedom, which has had to upgrade its network this year to carry the Apple products.
Last weekend's price war spawned significant negative social media feedback for Telus, Rogers and — to a lesser extent, Bell — when their customer service phone and chat lines weren't able to keep up with demand.