Virgin Mobile USA — Sprint Corp’s (NYSE:S) no-contract wireless provider — made a big announcement yesterday. Virgin is offering one year of unlimited service for $1. In addition, Virgin Mobile USA will be the first U.S. carrier to exclusively hold the Apple Inc. (NASDAQ:AAPL) iPhone.
To get that special offer, you’ll need to buy an iPhone at full price. And if you’d rather buy an Android smartphone from Virgin Mobile, forget it.
Going forward, AAPL is the only company whose devices are available.
Virgin Mobile USA’s Inner Circle
Virgin Mobile USA’s new unlimited plan was announced on June 21, and it’s called “Inner Circle.” Starting June 27, buy an iPhone (SE, 6s, 6s Plus, 7 or 7 Plus) and get six months of unlimited talk text and data for $1. Buy before July 31 and you get a full year at that rate.
Plus, Inner Circle members get perks like a free night at a Virgin hotel and discounted airfare on Virgin flights. For every customer signed up, Virgin Mobile is also making a charitable donation to help fight hunger in America. After the promotional period is up, the rate switches to $50 per month.
U.S. wireless carriers have employed a new tactic in their battle for market share in recent months. Each is fighting to offer the lowest price on unlimited mobile plans, including throwing in extras to sweeten the pot.
For example, at the end of February AT&T Inc. (NYSE:T) introduced new unlimited plans that upped the ante over their previous offering with improved tethering, discounted additional lines and a $25 monthly credit on customers’ DirecTV bill.
Sprint has its own “Sprint Unlimited” plan, but saw the opportunity to leverage the cachet of its Virgin Mobile USA brand and take advantage of the popularity of the iPhone in this country. In the latest data released, AAPL continued to dominate U.S. smartphone sales.
The company accounts for over 36% of all smartphones sold in the U.S., and the iPhone 7 and iPhone 7 Plus are the most popular phones in the country. Android smartphones, however, have seen a decline in popularity in the American market over the past year — despite high-profile releases like Alphabet Inc’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google Pixel Phone and Samsung Electronics (OTCMKTS:SSNLF) Galaxy S8.
It probably didn’t hurt that Apple also offers a red iPhone 7 that happens to match Virgin Mobile’s branding quite nicely.
As part of the embracing of all things Apple, Virgin Mobile USA also announced it will become the first American carrier to be iPhone-exclusive, and its services will be available in Apple Stores.
You won’t find any Android smartphones for sale on Virgin Mobile’s website. If you don’t have the budget for one of AAPL’s devices, the company will sell you a “pre-loved” (refurbished) iPhone that still qualifies for the new unlimited plan.
Apple is naturally happy about the partnership and provided a quote from its SVP of Worldwide Marketing for the press release:
“We’re thrilled Virgin Mobile is becoming the first iPhone-only carrier, and we’re excited to be able to offer Virgin Mobile services directly to our customers in Apple stores.”
Who Wins With the Unlimited Plan?
Consumers should be happy about the Virgin Mobile Unlimited plan, at least if they plan to be buying an iPhone in the next month or so. AAPL is also getting some positive press out of this, plus the ability to brag about a major carrier ditching Android altogether to go iPhone-exclusive. It may even move a few more of those red iPhone 7 boxes thanks to Virgin Mobile’s marketing.
For Virgin Mobile USA and parent company Sprint, the Inner Circle offer is going to be expensive, but it’s a cost of doing business. Sprint is the fourth-largest U.S. wireless carrier and leveraging Virgin Mobile USA’s luxury appeal, plus tying it into the appeal of AAPL’s premium iPhones, could help it to gain a little ground.
Excluding Android, however, which still accounts for over 60% of smartphones sold in the U.S., could backfire. But when you’re number four, you tend to take a few more risks than the top three.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.