Consumer Confidential: Verizon iPhone soars, Hyundai's new gimmick, pricier Big Macs
--How powerful is the iPhone? On Wednesday we learned that AT&T saw a big drop in customers taking out long-term contracts after the company lost its iPhone exclusivity. And Now Verizon, the new iPhone provider, says it added 906,000 wireless subscribers on contract-based plans in the January-to-March period, more than double the number of a year ago. The increase corresponds with the half-million iPhones Verizon sold to new subscribers. In total, Verizon says it activated 2.2 million iPhones, with most of them going to customers upgrading from other Verizon phones. The real test will be when the next version of the iPhone comes out (probably this summer) and Verizon and AT&T offer it simultaneously.
--Give Hyundai this much: The South Korean carmaker knows a good sales gimmick when it sees one. First it was the 10-year, 100,000-mile warranty. Then came the option of returning your car if you lost your job. Now Hyundai says it will guarantee the future trade-in value of its new vehicles. The catch is that customers will have to document that they completed all factory-recommended maintenance at a Hyundai dealer. If they do that, the company will guarantee what the trade-in value of that vehicle will be after the second full year of ownership through the fourth year. "Depreciation is the single highest cost of car ownership," says Hyundai CEO John Krafcik. The company's new program, which begins May 1, is intended to address that.
--Having a Big Mac attack will soon get pricier. McDonald's says higher costs for beef, bread and other items cut into its quarterly margins and that inflation for the year will be worse than expected. In January, the fast-food giant said it expected its food costs to be about 2.5% higher this year. Now the company says those costs could be as much as 4.5% higher. As a result, most analysts expect Mickey D's to raise prices for many menu items. Just think: If the price for fruit, vegetables and other good-for-you foods came down, we could reach a tipping point where it actually becomes cheaper to eat healthy. Perish the thought.
-- David Lazarus
Photo: The iPhone has been good to Verizon. Credit: Brendan McDermid / Reuters