Best Buy’s $100 iPhone X surcharge was tied to carriers

Best Buy doesn’t sell iPhones like Apple does — Apple sells iPhones like Apple does. And Apple can make the most money by selling phones itself.

The big box tech retailer, which would otherwise also work with the OEM for stock, has to make do by partnering with carriers to get some stock for sale. It sells them through those carriers’ prorated financing plans and, occasionally, at full retail price.

So, what was Best Buy doing when it started offering iPhone X pre-orders at an outright price of $100 more than the MSRP?

In a blog post, the company effectively said that it only gets a kickback credit from carriers if the phone is activated on their network.

These unactivated phones were priced higher than those we sold with a contract to reflect the fact that the phone carriers only pay us when a phone we’ve sold has been activated on their network.

The retailer wouldn’t have any incentive for acting as a middle man if it couldn’t guarantee an activation on a network.

Best Buy has stopped offering iPhone X units for a lump sum payment and hopes to work out something better in the future. Until then, you’re stuck with the carrier financing options at the store.

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About The Author
Jules Wang
Jules Wang is News Editor for Pocketnow and one of the hosts of the Pocketnow Weekly Podcast. He came onto the team in 2014 as an intern editing and producing videos and the podcast while he was studying journalism at Emerson College. He graduated the year after and entered into his current position at Pocketnow, full-time.