U.S. Cellular to Begin Offering Apple Products Later This Year
As part of its quarterly earnings release today, U.S. Cellular announced that it will begin carrying Apple products later this year, although the carrier offered no additional details on its plans.
"We have a number of strategies in progress to increase loyalty and attract more customers, including our announcement today that we will begin offering Apple products later this year. By further strengthening our device portfolio, we'll give consumers another great reason to switch to U.S. Cellular, and enable our existing customers to choose from an even wider variety of iconic smartphones, and enjoy the outstanding U.S. Cellular customer experiences they deserve. Our smartphone penetration is currently 43 percent of core market customers and growing quickly. We believe there will be strong, ongoing demand for smartphones and data products and services from our customers, and we have significant room for growth in this area.
The move marks a reversal for U.S. Cellular, which said in late 2011 that it had declined to carry the iPhone due to "unacceptable" terms being offered by Apple.
Carriers offering the iPhone generally see short-term hits to their profitability due to upfront subsidies that are typical in the U.S. wireless industry, although many carriers have viewed that impact as acceptable in order to gain access to the popular device. Apple has also routinely demanded that carriers commit to purchasing certain numbers of iPhones over a period of years, something that some carriers have been reluctant to do for fear of being stuck with unsold devices.
U.S. Cellular, which has 5.7 million subscribers, may become the last of the top U.S. carriers to offer the iPhone. Major carriers Verizon, AT&T, Sprint, and T-Mobile all now offer the device, while Leap Wireless/Cricket began selling the iPhone last year. MetroPCS is also likely to begin offering the iPhone following its merger with T-Mobile, although an offering is said to not be imminent. The last of the top carriers, TracFone, also offers the iPhone through its Straight Talk partnership with Walmart.
Update 9:37 AM: U.S. Cellular has issued an additional statement to AllThingsD:
We will be selling iPhone products later this year. We don’t have any additional information at this time but will follow up closer to the launch. The deal we’ve made to sell iPhone products is right for our business today, because we now have an LTE solution that enables a successful partnership with Apple.
Update 10:27 AM: Dow Jones Newswires reports that U.S. Cellular has committed to purchase $1.2 billion worth of iPhones over a three-year period.