Apple Tries New Purchasing Flexibility with the iPhone SE

Mark Gurman, writing for Bloomberg about an intriguing new development:

Starting with the iPhone SE — a low-end model that goes on sale Friday for $429 — that process is changing, Apple has told retail employees. New iPhone SE buyers who choose AT&T Inc.or T-Mobile US Inc. as their wireless carrier won’t need to provide their information at the time of purchase. Instead, shoppers will be able to enter that data and connect to their carrier when they power on the device for the first time.

I can tell you from experience that connecting with carriers was often the longest and most frustrating part of selling a new iPhone. I’m happy for Apple’s retail Specialists who won’t have to deal with that part so much — the outcome of which is largely out of their control — but I’m a little worried for customers. It’ll be nice for the customers who want to get out of the store quickly and on with their day. On the other hand, I anticipate that inevitable carrier setup issues will have just deferred customer frustration to when they’re home and don’t have a techy” person around to help.

Retail employees say the change also could benefit customer service. Sometimes activation servers can be overloaded and customers leave Apple retail stores with their phone not working — a poor experience that that new approach would mitigate.

Pushing this process out of the purchase flow won’t resolve all the underlying issues that often halt a sale — a credit denial, forgotten PIN, or incompatible carrier plan — though it might shift the blame for those barriers away from Apple to its rightful place with the carriers or customer themselves. But if they can’t figure it out on their own, they still won’t be a happy user.

Apple will also let users purchase an iPhone SE in stores with Apple Card monthly installment plans — without connecting it to a carrier.

I am happy to see that more customers will be able to purchase phones with Apple’s no-fuss installment plans. When I sold phones, I always felt silly telling customers they couldn’t use Apple Card Monthly Installments unless they connected the phone with a carrier in-store. Apple’s first-party payment option shouldn’t rely on third-party plans. Apple Card is the most transparent credit card I’ve ever seen and truly encourages people to pay less interest. If they’re going to use credit to pay for a phone, customers could do a lot worse than with Apple Card.

All-in-all, I expect that fewer customers will be denied from making a purchase due to carrier stipulations. Many prospective iPhone customers don’t realize that they have to be an Authorized User’ on their carrier account to be allowed to make plan changes like connecting a new phone to a new or existing line. If they didn’t bring a photo ID that matches the list of Authorized Users for their account, they couldn’t purchase through the carrier’s installment plan or Apple’s. Their only option was to pay full price for the phone and connect it on their own later. Very few people want to purchase their phone in full these days, so I had to deny plenty of legitimate purchases to spouses, grown kids, and grandparents on family plans because they didn’t know about the red tape.

From Gurman’s reporting it sounds like that should no longer be as big of a problem since they could apply for Apple’s financing instead:

The faster purchase experience only applies to users buying an iPhone via Apple’s own installment plans or at full price, meaning that customers who want to use a carrier deal will need to use the more complex process. That could help Apple push users toward its own financing plans.

Overall, I think the additional flexibility will be good for Apple’s customers and hope these options will make their way to the rest of the iPhone lineup. But it doesn’t mean that the underlying issues are all resolved.

Go to the linked site (Mark Gurman // →


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