Will Verizon’s Free iPhones Help Apple Win New Loyalists?

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There are some companies outselling Apple’s (NASDAQ:AAPL) iPhone. Android smartphones are more purchased globally than iPhones. As of the third quarter last year, Samsung (SSNLF.PK) and Nokia (NYSE:NOK) sold more phones than Apple globally. But this next competitor comes out of left field: Apple’s current iPhones are being challenged by Apple’s older iPhones.

It seems not all smartphone buyers are interested in shelling out $650 to buy the shiny new iPhone 5. Some are defecting to phones made by companies like Google (NASDAQ:GOOG) and Nokia, but those intent on getting their hands on an iPhone now have a cheaper option — and they’re taking it.

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Verizon Wireless (NYSE:VZ) is offering customers old merchandise at a steep discount — those signing 2-year contracts can get the iPhone 4 for free. The lure of a free iPhone, even an older model, helps Verizon rope customers into expensive and highly-lucrative contracts while clearing stocks of outdated phones. And the practice is good for Apple, as well. Once users are drawn into the Apple ecosystem, many tend to buy more Apple products over the years — a phone upgrade, an iPad, maybe eventually a desktop. The synchronicity of Apple’s products, the way they complement each other, encourages users to buy more devices running Apple’s OS or iOS…

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