RadioShack Gives Away iPhone 5S

There are a few conditions of course, but they’re not hard to meet. The deal is available from AT&T Inc. (NYSE: T), Verizon Communications Inc. (NYSE: VZ), and Sprint Corp. (NYSE: S). New customers who sign up for a two-year contract can get the iPhone 5S for just $99 without a trade-in or free with a trade-in for either an iPhone 4S or iPhone 5.

No word yet from Apple Inc. (NASDAQ: AAPL), but the company can’t like equating its top-of-the-line iPhone with a clam-shell feature phone. It’s not that RadioShack Corp. (NYSE: RSH) won’t pay Apple’s full price for an iPhone, it’s an image thing for Apple. Reports suggest the iPhone 6 will come out in September.

Now it could be that this offer means that RadioShack is clearing its inventory of iPhones and will no longer be selling them. The company’s struggles are well-known; it posted a huge loss in the December quarter and analysts expect losses as far as the eye can see. Because RadioShack gets no visible benefit from its knockdown price on the iPhone 5S, dumping the Apple product is the only explanation for the giveaway.

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I spoke to someone who lives in one of those big, square states out west, and who owned an iPhone 4S. He drove 300 miles round-trip to get the free iPhone 5S, which is only available from corporate-owned stores, not the franchised store just around the corner. The store clerk told him he was just the second customer to take advantage of the offer and that he had to take the 5S in silver because that’s all the store had left. Being a practical sort, this was not a deal-breaker.

Shedding the iPhone — and probably the iPad — is not likely to be a big loss for RadioShack, and it’s almost certain to be no skin off Apple’s nose. Still, this is the first time that an iPhone 5S has been available for free and probably the first time the top-of-the-line Apple iPhone has ever been given away by any vendor.

RadioShack’s shares closed down nearly 16.6% on Thursday at $1.41 following reports that negotiations with the company’s lenders about how many stores to close are not going well.  Some lenders want to close up to 2,000 stores while the company said last month it would close up to 1,100 and is targeting just 200 currently.

The stock has collapsed from an April 2010 peak of $24.

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