How Soon Will the iPhone 5 Be Free?

By Douglas A. McIntyre Published Mar 6, 6:27AM EST

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Wal-Mart Stores Inc. (NYSE: WMT) recently dropped the price of Apple Inc.’s (NASDAQ: AAPL) iPhone 5c to $29, as long as customers get a two-year contract from AT&T Inc. (NYSE: T) or Verizon Communications Inc. (NYSE: VZ). As the launch of the iPhone 6 approaches and the competition for smartphone market share rises, that price may be $0 before the end of spring. Apple’s iPhone, once the clear and outright leader in the smartphone industry, has lost much of the retail leverage it had when its products were considered revolutionary.

Granted, the iPhone 5c has fewer features than its stablemate iPhone 5s. However, the market for smartphones does not only include products that bristle with capabilities, which may run from complex navigation to high-end cameras. The iPhone 5c has an advance A6 chip, 10 hours of LTE browsing time and the ability to record video in 1080p HD. That is almost certainly enough for most people who want or need a smartphone.

Apple’s price challenges have been well articulated already. Each generation of iPhone seems to have fewer upgrades in features than the one before it. Introductions of new iPhones are no longer national events, watched by millions of people as Steve Jobs walked around a stage explaining the many benefits of the new product.

As such, the iPhone has become ordinary. Samsung makes as good a product, according to many expert surveys, and more importantly sales figures. Its new Galaxy 5 is expected to give the South Korean company a surge in sales. This smartphone will make it to market before the iPhone 6, which may soak up much of the demand for new smartphones, each generation of which appears on an every-year cycle. Apple no longer controls this cycle of upgrades. It is fortunate if it can catch Samsung’s new products with iPhones that reach the market a few months later.

The $29 iPhone is on the market now. Prices have continued to drop since the smartphone was first introduced. To clear inventory, the iPhone 5c will be free soon, and Apple products will have lost more of their luster.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.