The 50 percent-off iPhone X promotion at Sprint is getting favorable attention from outsiders. But don't get the wrong idea.
Sprint isn't selling the $999.99 device to new subscribers for half off its retail price. Sprint is discounting the monthly lease payments for new subscribers who sign up for an 18-month Sprint Flex lease of the new phone.
The distinction is hardly technical. The difference for a consumer who wants to own the phone amounts to more than $100.
But it's easy to get the wrong idea.
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"The unrivaled iPhone X for 50% off," said the promotional headline on Sprint's website.
"That, to me, is a clear offer that I'm getting an iPhone at half price," said John Simpson, director of the privacy and technology project at ConsumerWatchdog.com.
Simpson noted that further reading showed he would not be able to buy the phone for half off.
Sprint gets its 50 percent language from the $41.67 it would charge normally for an 18-month lease of a $999.99 iPhone X. The promotion credits customers $21.67 a month, so they end up paying $20 a month to use the iPhone X during the lease.
Half off, or 52 percent off to be more precise.
This is similar to the installment purchase deal at Verizon. Verizon charges $41.66 a month for 24 months to collect the full price of the iPhone X.
And here's how Sprint's deal has been described by others.
"Sprint is currently offering the iPhone X at 50 percent off its full retail price," said a roundup on iPhone X deals posted by Henry T. Casey at Tom's Guide.
The headline at WhistleOut said "Sprint Slashes Price of iPhone X by 50%."
A review by Louis Ramirez, also at Tom's Guide, said: "For a limited time, the carrier is taking a whopping 50 percent off the price of the iPhone X."
Sprint CEO Marcelo Claure's reaction to Ramirez's review was to tweet it out.
Other descriptions have been a bit more circumspect. Tech Times writer Carl Velasco described the offer this way:
"Customers can now get the iPhone X from Sprint for a whopping 50 percent off via the Flex lease program. Is it really 50 percent less, though? Simply put, they don't really end up owning the phone once the program ends, and the iPhone X isn't technically half the price. Surprise. Surprise."
Consumer Reports smartphone editor Bree Fowler said the promotion is much like others in the industry.
"With any carrier and any deal, you have to look and read the fine print," Fowler said in an interview. "If you look at their website, it says save 50 percent, and that's not really true."
Sprint spokeswoman Michelle Mermelstein said in an interview that the company was careful with the wording of its promotional language even if some other writers were less clear. She said the review that Claure tweeted out was "not really inaccurate."
Ramirez correctly wrote that customers have to sign up for a Sprint Flex lease to get the $20 a month iPhone X. He also pointed out that at the end of the 18-month lease, you won't own the phone. But you can "pay off the device and keep it," he wrote.
His post and others have failed to tell readers how much the payoff price is.
Simpson said the same is true for Sprint's website.
It covers the $41.67 a month lease price, the $21.67 a month credit and the $20 a month lease payment by the consumer. It also said the customer could buy the phone at the end of the lease by paying the difference between the full retail price " and what you've paid so far." Mermelstein confirmed that includes the credits from Sprint during the lease.
Sprint's website doesn't say how much the pay-off price is.
Mermelstein filled in the gap.
"At the end of the 18 month lease … the customer could choose to purchase the device for $249.93, making the total cost to own the device $610.02," Mermelstein said in an email.
Paying $610.02 for the $999.99 iPhone Xis a tidy discount. But that's 39 percent off, not 50 percent off. Which is fine as long as consumers don't get the idea they can buy an iPhone X for 50 percent off.
Sprint customers who sign up for a leased iPhone X also should be alert to the terms of the deal after 18 months. If they don't buy the phone, trade it in or return it to Sprint, the lease payments climb to $41.67. The lease payments also no longer apply to purchasing the phone from Sprint.
That's because Sprint changes the price to buy the phone starting with the 19th month. Instead of the difference between the $999.99 and what the lease covered, the customer now must pay the "fair market value" price for their 18-month-old iPhone X. This is what the phone would sell for used in the marketplace.
Experience with earlier iPhone models shows that market price typically is higher than the remaining $249.93 at the end of the lease.