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T-Mobile iPhone 5/5S coming next year, what does it mean for Android?

Just a few days ago we told you that T-Mobile was likely to announce a partnership with Apple in the very near future – or better said the launch of the iPhone 5 with the fourth largest carrier in the country – and it looks like that has sort of happened.
December 6, 2012

Just a few days ago we told you that T-Mobile was likely to announce a partnership with Apple in the very near future (this week) – or better said the launch of the iPhone 5 with the fourth largest carrier in the country – and it looks like that has sort of happened.

Deutsche Telekom, the mother ship in charge of T-Mobile’s destiny, issued a press release today detailing its mobile plans for the coming years. Since T-Mobile is a big part of Deutsche Telekom, we were not surprised to see the U.S. carrier mentioned quite a few times in the document. And yes, Apple was also there.

In a simple phrase towards the middle of the press release, Deutsche Telekom shyly confirmed that the iPhone is coming to T-Mobile. But that won’t happen before Christmas 2012. Only at some point next year will Apple products be officially sold by T-Mobile:

In addition [to deploying LTE in Germany and the USA], T-Mobile USA has entered into an agreement with Apple to bring products to market together in 2013.

What iPhone is coming to T-Mobile?

T-Mobile has been shunned from the iPhone expansion in the USA because of its 3G network that was not compatible with any iPhone device sporting 3G/4G capabilities. Instead of building a special T-Mobile iPhone, Apple preferred to ignore the carrier for so many years. And right now, T-Mobile is the only major mobile operator in the region that’s not supporting the iPhone. At least not officially.

There are well over 1 million unlocked and/or jailbroken (and subsequently unlocked) iPhones running on T-Mobile’s 2G network, a sacrifice iPhone users put up with in order to escape AT&T, the other major GSM carrier in the country.

But the fact is T-Mobile can’t afford to lose more costumers for not being able to officially carry Apple’s smartphone. The mobile operator has started deploying iPhone-friendly HSPA+ networks in some markets, and will make the move to LTE in the coming years, all signs telling Apple that T-Mobile is getting ready to offer the iPhone to its subscribers.

However, the press release is rather vague, so at this point it’s not clear whether the iPhone 5 is coming early in 2013 to T-Mobile, or whether the carrier will wait for the seventh-generation iPhone – most probably called the iPhone 5S – to get official before launching that model. The iPhone 5S is expected to hit next year anywhere from summer-to-fall, depending on what early rumor you listen to, and by the time it happens, T-Mobile would have time to offer more iPhone 3G/4G support in other markets.

Deutsche Telekom will not say anything at this point about iPhone plans, but it’s pretty clear the iPhone investment will be pretty costly for the company. As you can see in the following fragment, the introduction of Apple products, right alongside the purchase of MetroPCS and other investments will be responsible for a drop in free cash flow:

The Group’s free cash flow is expected to decrease to around EUR 5 billion in 2013 (scheduled figure for 2012: around EUR 6 billion), primarily as a result of the increased capital expenditure and the systematic implementation of the Challenger strategy in the U.S. market, including the agreement with Apple. The Group’s free cash flow is expected to be around EUR 6 billion in 2015 (including MetroPCS).

What does it mean for Android?

Like others before it that had to keep customers happy without having the iPhone in stock – see Verizon and Sprint in the years before they started selling iOS smartphones – T-Mobile has invested a lot in selling Android devices, from low- to high-end. The company has offered most of the past and current flagships to interested customers and ran several promotions over the years to try to entice as many Android buyers to purchase a T-Mobile Android handset.

The carrier did have some exclusive Android devices in the region as well, including the Nexus 4, which is currently available only from T-Mobile in the U.S., but Android alone was not enough to prevent T-Mobile from losing any customers.

However, the iPhone’s arrival doesn’t mean that T-Mobile will ignore Android or any other mobile platform starting with 2013. In fact, we expect just as many Android devices to be available from the carrier in the years to come. After all, none of its competitors stopped selling Android devices just because they have the iPhone in stock. Whether it’s Verizon, AT&T or Sprint, each one of them has a solid Android offering right next to their iPhone versions.

Not to mention that carriers around the world, T-Mobile included, are probably happier to sell Android devices to consumers rather than iOS handsets. That’s because with Android carriers can still muscle around Google and some Android device makers when it comes to custom Android devices or pre-loaded crapware. Whereas with Apple things are more difficult, with no carrier anywhere in the world being able to convince the iPhone maker into any sort of compromise.

Not to mention that the iPhone is a more expensive handset to sell. Again, because unlike smartphone makers, Apple won’t budge when it comes to price and carriers have to put up with offering expensive subsidies to customers, especially in the competitive U.S. mobile environment.

Other Apple devices

The press release doesn’t specifically say “iPhone” anywhere in it, but it’s definitely implied that the iPhone will hit T-Mobile in the following year. Deutsche Telekom does refer to Apple products, as you can see in the quotes above, which may mean that iPad versions could also be officially available in T-Mobile stores at some point in 2013, particularly the 3G/4G iPad and iPad mini models. Naturally, this is all speculation right now, and we’ll have more details about this continuously-changing U.S. mobile landscape in the following months.

Does the fact that T-Mobile is getting the iPhone soon affect you and your mobile purchases in any way?