Wireless phone carrier Consumer Cellular has struck a deal with Apple to start carrying the latest versions of Apple’s iPhone, creating a new revenue opportunity for the fast-growing Tigard company.
Consumer Cellular markets cell phones to seniors, offering limited-use and no-contract plans to budget-minded customers. Founded in 1995, Consumer Cellular thrived initially by offering bare bones phones at rock-bottom prices. It operates by leasing space on AT&T’s wireless network.
At one time, Consumer Cellular said, basic phones were all its customers wanted. The wireless market has evolved, though, and even older customers now want continuous access to e-mail and the Internet.
Consumer Cellular says a quarter of its revenues now come from smartphones — at this point, that’s exclusively Android phones (though Consumer Cellular did offer a small quantity of older iPhones a few years ago through a reseller.)
Apple, meanwhile, has been steadily expanding the list of companies authorized to carry the iPhone, adding regional carriers and prepaid or no-contract companies, including Virgin Mobile and Cricket Wireless. Consumer Cellular joins that list beginning Dec. 13.
“We really think this is going to be a huge step forward for us,” said John Marick, Consumer Cellular’s co-founder and chief executive.
Consumer Cellular will carry the two-year-old iPhone 4s and Apple’s latest models, the iPhone 5c and iPhone 5s. Customers don’t sign a contract, so must pay the full cost of the phone — considerably more than what AT&T, Verizon and others charge iPhone customers who agree to a two-year contract.
So for a 16-gigabyte iPhone 5s, customers must pay $650, starting with a $150 up-front payment and then $25 a month for 20 months.
The tradeoff is that Consumer Cellular offers low-use plans that big carriers such as AT&T and Verizon do not. A customer who spends fewer than 100 minutes a month talking on the phone, for example, and limits cellular data use to 500 megabytes a month, can sign up for a $30 monthly plan.
A typical plan from AT&T costs three or four times that. Even AT&T customers who agree to limit their monthly use to just 300 megabytes a month generally pay at least $70 a month (though they do get unlimited phone calls.)
Consumer Cellular expects about $340 million in revenue this year, up 30 percent from 2012, and forecasts 30 percent growth again next year — driven, in part, by the addition of the iPhone to its lineup. The company has grown to 950 employees, divided among its headquarters in Tigard and call centers in Redmond and in Arizona.
Consumer Cellular markets its phones online, through a partnership with AARP, and in Sears stores. Marick said that he expects to add other retail partners in the first half of 2014.
Its rapid growth has made Consumer Cellular one of the largest tech companies in Oregon, and Marick has said in the past that prospective investors and other suitors have occasionally called on the company. But he said the company’s managers feel no urgency to quit and go sit on the beach, and that their business is funding their growth on its own without outside help.
“We don’t need to get extra capital from someone else,” Marick said.
Oregonian (Portland, OR)
(c)2013 The Oregonian (Portland, Ore.)