With every new iPhone model that Apple dishes out, the general value of the older iPhone models diminishes. However, it allows a carrier such as Verizon Wireless to offer an older model for free, which is able to entice a whole lot of more customers, reveals Verizon’s CFO Fran Shammo.

Some of the latest flagship smartphones are available with different carriers for free. However, none of Apple’s iPhone models has been available for free with a carrier at the time of its launch. Once a new iPhone model arrives, however, the carriers have the opportunity of either discounting the price of the older iPhone models they carry or simply start offering them for free.

Upon the launch of iPhone 5, Verizon Wireless started offering iPhone 4 free on-contract. The move turned out to be a major success for the carrier. According to Shammo, “This past fourth quarter, you … had really one thing happen that never happened before, especially with Verizon Wireless, and that was for the first time ever, because of the iPhone 5 launch, we had the 4 at free.”

Incidentally, the free iPhone 4 on-contract was the first-ever iPhone that Verizon Wireless has ever offered for free. Naturally, customers lined up to lay their hands on it. It is certainly reassuring for Apple that even the older iPhone handsets are able to command so much customer interest.

But at the same time, it poses a significant challenge: when a huge number of potential iPhone users divert their attentions to older iPhone models, this takes away the limelight from more recent iPhones, such as the iPhone 5. It also turns the overall iPhone user base into a more fragmented structure.

Courtesy: All Things D

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