Boston, MA 08/15/2014 (wallstreetpr) – AT&T Inc. (NYSE:T), a leading wireless carrier that is uncomfortable with how rivals are getting stronger in the business, has made a move that only theories can explain while putting Apple Inc. (NASDAQ:AAPL) in the picture. The company announced a discount of $200 on iPad for customer who buys a full-price iPhone5S or iPhone 5C, CNET reported in an article. All that happened while the market is anticipating a brand new line of iPhone, possibly coming as iPhone 6. Also, Apple Inc is expected to unveil new iPad devices later in the year.
Shares of AT&T moved up a bit on Thursday, gaining 0.63% to $34.91, but the stock was last seen at $34.96 after gaining 0.14% in the aftermarket session.
Motive questioned
In a move to offer such a hefty discount on iPad, many questions have been asked about AT&T Inc. (NYSE:T)’s motives. It is a well-known fact that Verizon Communications Inc. (NYSE:VZ), Sprint Corporation (NYSE:S) and T-Mobile US Inc (NYSE:TMUS), have all sharpened their competitive edge to draw subscribers to their networks. Therefore, it appears as though AT&T is out to make a financial sacrifice to win wireless subscribers, especially for the data services.
AT&T Inc. (NYSE:T) already offers monthly data plans in which an additional device like an iPad would only add $10 a month to the cost. That means that a heavily discounted iPad would not only boost sales of the same and even the iPhones, but also has the potential of getting subscribers to update to higher data plans, which in turn would boost revenue at AT&T.
Boosting older iPhone sale
The discount of iPad has also been seen as an effort by AT&T Inc. (NYSE:T) to clear the older smartphone and iPads ahead of the iPhone 6 launch. The company said customers can enjoy the iPad discounts at its owned and operated stores.
Shares of AT&T Inc. (NYSE:T) are down 0.71% this year, a sign of pressure in the stock as competition erodes revenue and profits.
