T-Mobile

With its back against the wall, T-Mobile has decided to shake up the mobile market by putting an end to subsidized smartphones. All four major U.S. carriers offer smartphones at a subsidized price, but customers must agree to long contracts which prohibit them from upgrading their devices. T-Mobile believes ditching the subsidy model favored by AT&T, Sprint and Verizon will appeal to customers who are tired of the restrictions. Chief Executive John Legere said under the new model customers will be able to freely upgrade their devices by trading them in.

Legere did not say when the carrier plans to rollout its new policy, but promised the Apple experience would be "dramatically different" for T-Mobile customers. T-Mobile also managed to avoid agreeing to the same $15.5 billion iPhone deal Sprint signed up for last year, and the move will help T-Mobile cut back on upfront costs.

As expected, Deutsche Telekom has announced its U.S. subsidiary T-Mobile will be carrying the iPhone in 2013. The telecommunications company tweeted the news on Thursday:

$DTEGY T-Mobile USA has entered into an agreement with #Apple #dtcmd $AAPL

— Deutsche Telekom IR (@DT_IR) December 6, 2012

Merrill Lynch's Scott Craig accurately predicted the deal last week when he told investors "speculation is heightening" that Deutsche Telekom and Apple will enter into an agreement. The deal gives Apple access to 98% of the U.S. post-paid market, and analysts are predicting T-Mobile will sell around 4 million iPhones next year.

The iPhone 5 can now be purchased unlocked in the U.S. via the Apple Store. An unlocked iPhone allows Apple customers to buy the device without agreeing to a two-year carrier contract, however, this also means users are stuck paying an unsubsidized price. Apple is offering the 16GB model for $649, the 32GB model for $749 and the 64GB model for $849.

The unlocked iPhone 5 only works with GSM wireless networks such as AT&T and T-Mobile (T-Mobile customers considering buying an unlocked iPhone 5 may want to wait until next week to see if the T-Mobile iPhone rumor is true). The unlocked iPhone 5 does not support CDMA-based carriers such as Verizon Wireless or Sprint, and requires a nano-SIM card to work.

Deutsche Telekom is rumored to be working on a deal to bring the iPhone to its U.S. subsidiary. Merrill Lynch's Scott Craig told investors "speculation is heightening" that the telecommunications company will announce a deal with Apple at next week's analysts day.

T-Mobile has been working on expanding its high-speed HSPA+ network, and even offers free iPhone support, and iPhone nanoSIMs to its customers using unlocked devices. It has been estimated that T-Mobile is carrying nearly a million unlocked iPhones on its network.

Shipments of nanoSIM cards have begun rolling out to T-Mobile stores this weekend. The nanoSIMs can be used with unlocked iPhones to access T-Mobile's HSPA+ network. T-Mobile has been working hard to convince iPhone users to switch carriers by promising bigger savings and unlimited data plans.

T-Mobile also began offering free iPhone support to its customers in June, and announced it was building a iPhone-compatible 4G network in May. Unlike the other big U.S. carriers (AT&T, Verizon and Sprint) T-Mobile does not officially carry the iPhone, however, it is estimated over one million T-Mobile subscribers use the Apple phone on T-Mobile's network.