What I found was more than just interesting. People of all ages, ethnic groups, and obvious socio-economic segments of society have iPhones. That bodes well for Apple’s future because the iPhone has become the industry’s first affordable luxury.
Just as interesting is the latest announcement from Walmart which plans to offer prepaid iPhone 5s and 5c with the company’s StraightTalk and Net10 plans.
Walmart discounts both of Apple’s phones, and offers a no-contract 30-day plan for unlimited talk, text, and data (whereby ‘unlimited’ means it slows down after 2.5GB of data usage) for $45 a month.
Net10 has a family plan that starts at $50 a month for the first line, and $40 a month for each additional phone– unlimited talk, text, and data but without sharing.
Affordable Luxury For All
During my weekend of mall hopping I noticed a number of people who appeared to be homeless, close to homeless, economically challenged– begging for dollars at various mall and big box store entrances.
In three of the four locations I traveled while Christmas shopping I noticed that some of them had bright white earbuds and were holding an iPhone in their hand. What does that say when a gold iPhone 5s sells for double the retail price on eBay?
Apple’s iPhones are affordable luxury items– luxury for the masses. Walmart makes it even easier to buy a luxury item by offering discounts and an affordable monthly plan for service.
For example, at an Apple Store you can buy an iPhone 5s for use on a major carrier starting at $199. A typical AT&T two gigabyte plan starts at $95 a month for 24 months, a total of $2,280. Or, you can buy an iPhone 5s from Walmart for $649 and pay only $45 a month for a similar plan, for a total of $1,729– a savings of $551 over 24 months.
That extra $550 goes to AT&T (or, Verizon, Sprint, et al with similar plans). What AT&T and other major carriers do is reduce the entry barrier– less money up front, though you pay much more in the long run.
What Walmart does is bring the iPhone’s affordable luxury to more people. Apple manages to maintain the allure of a premium brand that is sold at Walmart, at an affordable price.
Show me another manufacturer that does that.