Price, Network Perception to Drive iPhone Carrier Choice, Says New Street

There’s not enough differentiation among carriers’ iPhone 12 trade-in offers to make them consumers' main motivator in choosing a service, New Street Research analyst Jonathan Chaplin wrote investors Thursday, saying service price and perceptions of network difference will be bigger drivers. T-Mobile and AT&T offer the best deal with the trade-in of an iPhone 11 Pro; AT&T wins with a trade-in of the 11 or X; and T-Mobile and Verizon win with the trade-in of the iPhone 7, he said. Chaplin sees the most common trade-ins as iPhone 8, X and 11. All carriers claim “nationwide 5G” on lower frequencies, but speeds on these frequencies are only “slightly better than 4G,” said the analyst. T-Mobile has a slight advantage, claiming 260 million population 5G coverage vs. AT&T and Verizon at about 200 million. New Street believes the “real 5G” will happen on spectrum frequencies at 2.5 GHz and higher: “We expect speeds of 300-400 Mbps on 2.5 GHz and higher on millimeter wave.” T-Mobile has a “powerful advantage,” with 25 million covered today, growing to 100 million by year-end. Verizon and AT&T haven’t disclosed their population coverage on higher frequencies; Chaplin suggested it’s fewer than 10 million, possibly fewer than 5 million. “Whatever the coverage gap is today, it will only widen until Verizon and AT&T are able to deploy the C-Band in a couple of years.”