December 03, 2010, 8:15 AM — Best Buy will feature free smartphones each day in December, subject to a new or upgrade activation and a two-year service agreement from one of the four major U.S. carriers, the retailer announced early Friday.
The offer is good at all Best Buy stores, Best Buy Mobile speciality stores and online starting today. Best Buy said it developed the campaign based on the success of its Free Phone Fridays promotion in October.
Online retailers including Amazon.com have offered a variety of smartphone models for free or nearly free for over a year, and the U.S. carriers have promoted various offers, including AT&T's recent in-store pairing of one Windows Phone 7 (WP7) device for free with a purchase of another, subject to new service agreements.
For example, Amazon.com offered the new Samsung Focus WP7 smartphone and the BlackBerry Torch 9800 each for 1 cent, subject to a two-year AT&T service plan.
Other sites selling smartphones for free such as Wirefly have flourished in recent years as well. On Friday, Wirefly had a Droid Incredible by HTC for free with a new two-year Verizon Wireless agreement.
On one Saturday in June, T-Mobile announced that every phone it sold would be free , subject to an agreement to subscribe to a two-year family plan.
Generally, analysts have noted that the free phone campaigns are designed to promote in-store and online traffic, and to help carriers sign up new customers for two-year service plans in an industry where customer turnover is commonplace. The cost of the phone hardware itself can be incidental compared to a carrier's two-year service fee, analysts explained.
Carriers can charge $70 or more per month for voice, text and data plans for smartphones, although the most powerful smartphones require special monthly charges as well. Depending on the plan, with related fees and taxes, customers can spend $130 or more a month for smartphone service, which results in an annual bill of more than $1,500.