Are we seeing the end of subsidized phones?

[blairharrington]

You just don't see the obvious. Read my post again its very clearly explained. You gotta think about it from a savvy consumer point of view. Someone who wants more choices and encourage more competition in the market.

Honestly I thought your last post was a bit all over the place. Carriers are investing in infrastructure. And all T-Mobile is offering is a different payment plan for their phones. I commend their efforts but it's really not all that ground breaking. With T-Mobile you are still paying full price for a phone, just in 24 monthly payments, if desired.

 

[Midwayman]

But all T-Mobile is doing is allowing you to pay full price for a phone but in monthly installments. I don't see much freedom in that and I don't think what they are offering is really a big deal considering their service in many instances is just as expensive or close to the other big 3.

Sure, if you include the payments for a top tier phone, and upgrade every 24 months. However you can buy used and save. You can buy a mid-range device and save. You can shop around for the top end devices and save over what the carrier wants to charge. Subsidies lock you to a carrier. They force you to get the top end phone and upgrade on the dot if you don't want to be losing money. Its a pretty anti consumer practice. Separating the phone from the carrier is going to force make makers to compete more directly on price and the carriers to compete more directly on service. The whole weird combo we have going on now isn't good for us.

 

[dawheat]

Why exactly is the industry dissastisfied? AT&T and Verizon just pulled in record billions in profit and they're unhappy with the 2-year locking in mechasinm they created? Seems like they're trying to squeeze their consumers more by reducing 'subsidies' but not reducing plan costs.

 

[openwheel]

Carriers are making tons of easy money with the current system. You wouldn't believe how much Verizon sales reps make on commission by signing customers to contracts.

 

[zerogear]

That's what ticks me off about them, even if you're off contract, they don't have a decrease plan cost. I would much rather be using AT&T, but at the moment I'm getting 25% discount from AT&T anyway

 

[sze5003]

They pass it off as no contract. It still is a contract just in your device not your plan. If you cancel service great you still owe the balance of the phone. That is why I would rather buy my own device outright. Sure I'll pay more but I don't have to be stuck on any contracts weather they would be plan or phone contracts.

 

[blairharrington]

Sure, if you include the payments for a top tier phone, and upgrade every 24 months. However you can buy used and save. You can buy a mid-range device and save. You can shop around for the top end devices and save over what the carrier wants to charge. Subsidies lock you to a carrier. They force you to get the top end phone and upgrade on the dot if you don't want to be losing money. Its a pretty anti consumer practice. Separating the phone from the carrier is going to force make makers to compete more directly on price and the carriers to compete more directly on service. The whole weird combo we have going on now isn't good for us.

You can purchase a used phone and bring it to Verizon or AT&T for service without signing a contract.

Also how are you losing money if you choose not to upgrade your phone 'on the dot'?

 

[openwheel]

You can purchase a used phone and bring it to Verizon or AT&T for service without signing a contract.

Also how are you losing money if you choose not to upgrade your phone 'on the dot'?

Face palm.

 

[blairharrington]

Face palm.

Please don't be condescending to me and explain yourself.

 

[openwheel]

Why would you refuse subsidy from the carrier and pay the premium monthly service fee? Not smart.

You lose $ if you don't upgrade as soon as you are eligible. It is obvious if you understand thew fundamental business model of carrier subsidies. They offer phones for cheap because they charge you premium on the monthly service fee. They basically build the phone price into the monthly premium in disguise.

This has been repeated several times by many members already.

 

[lupi]

I don't see the new tmo as being so cheap so those in other networks on established plans will probably stay where they are and keep getting cheap phones.

The only place to really see this change is among new users, but is surmising that most of these are young buyers how many would be looking to buy something at full price when no one else requires that.

 

[sze5003]

You are only buying the phone at full price on these new price if you cancel service. Then you are pretty much stuck with a locked phone unless all the devices you can buy now under these plans come unlocked.

 

[blairharrington]

You are only buying the phone at full price on these new price if you cancel service. Then you are pretty much stuck with a locked phone unless all the devices you can buy now under these plans come unlocked.

You pay full price for your phone on T-Mobile either upfront or through a series of monthly payments. Either way if you accept a phone from T-Mobile you are paying the full price of that phone.

 

[blairharrington]

Why would you refuse subsidy from the carrier and pay the premium monthly service fee? Not smart.

You lose $ if you don't upgrade as soon as you are eligible. It is obvious if you understand thew fundamental business model of carrier subsidies. They offer phones for cheap because they charge you premium on the monthly service fee. They basically build the phone price into the monthly premium in disguise.

This has been repeated several times by many members already.

If you refuse the subsidy and pay full price up front you are still paying a 'premium' monthly fee.

This supposed hidden fee we are all paying monthly remains regardless if you upgrade your phone in 24 months or not. Again, I don't see how you are losing money by not upgrading.

Let's also make it clear that phones are 'cheap' up front because most American consumers are okay paying 0-$300 up front for a phone. If you ask for more they'll balk. This was the case with feature phones too. The ETF exists to protect the carrier. They paid more upfront to the OEM for the phone they give you than what you pay by in subsidized pricing.

 

[sze5003]

I've had better luck buying my phone's on swappa. Some come unlocked there too.

 

[openwheel]

I feel like I am explaining to a wall. Blairharrinton you are not understanding the basic concept. You are assuming that carriers actually eat $500 of the $699 retail price of iPhone. You are also assuming that without subsidy we would still be paying such premium monthly service fee. You underestimate the power of of consumers in the market. We cannot have a meaningful discussion without some basic principals understood.

Ciao.

 

[jpiniero]

I feel like I am explaining to a wall. Blairharrinton you are not understanding the basic concept. You are assuming that carriers actually eat $500 of the $699 retail price of iPhone. You are also assuming that without subsidy we would still be paying such premium monthly service fee. You underestimate the power of of consumers in the market. We cannot have a meaningful discussion without some basic principals understood.

Ciao.

This is so totally wrong I don't know where to start.

 

[sze5003]

Well either way you pay either 199 for an upgrade in a 2 year contract and the rest is fees that are within the service contract or now where you pay 20 bucks a month for 2 years plus a little cheaper price for monthly service, with an initial down payment on the phone. The way I see it it's still a contract. Yes you can upgrade the phone every six months but it's like a lease if you keep upgrading until you keep the phone for 2 years and then it's paid off. There may also be a penalty if you cancel service in essence they will make you pay what else is left of the 2 year "contract " of the phone itself.

 

[blairharrington]

I feel like I am explaining to a wall. Blairharrinton you are not understanding the basic concept. You are assuming that carriers actually eat $500 of the $699 retail price of iPhone. You are also assuming that without subsidy we would still be paying such premium monthly service fee. You underestimate the power of of consumers in the market. We cannot have a meaningful discussion without some basic principals understood.

Ciao.

My God are you dense.

http://money.cnn.com/2012/02/08/technology/iphone_carrier_subsidy/index.htm

 

[Kenmitch]

I feel like I am explaining to a wall. Blairharrinton you are not understanding the basic concept. You are assuming that carriers actually eat $500 of the $699 retail price of iPhone. You are also assuming that without subsidy we would still be paying such premium monthly service fee. You underestimate the power of of consumers in the market. We cannot have a meaningful discussion without some basic principals understood.

Ciao.

The big players like Verizon and AT&T will most likely not change the way they do biz.

If a customer is using either of the above he'd be a fool to pay full price for a phone and not change carriers. Most people don't change unless there unhappy with service.

I guess the exception would be for the data hogs that want to keep unlimited data.

 

[sze5003]

The big players like Verizon and AT&T will most likely not change the way they do biz.

If a customer is using either of the above he'd be a fool to pay full price for a phone and not change carriers. Most people don't change unless there unhappy with service.

I guess the exception would be for the data hogs that want to keep unlimited data.

Verizon is now offering Verizon edge and a max data offer of 6gb for 30 bucks a month if unlimited users give up unlimited data since most of them like me are no longer on a contract. The edge program is the same as tmobile, upgrade every 6 months with a payment for the phone each month, no interest, and a separate payment for service plan.

I don't always need the latest phone so I buy my phone online via swappa or eBay and will stick with my unlimited data until I find better options. For the edge program you must give up unlimited and move to the shared structure plans but for a limited time you can sign up to get 6gb of data for 30 bucks instead of the standard 2gb.

http://www.droid-life.com/2013/08/2...or-unlimited-customers-who-want-verizon-edge/

 

[openwheel]

My God are you dense.

http://money.cnn.com/2012/02/08/technology/iphone_carrier_subsidy/index.htm

You just don't get it. The article merely tells you Apple takes a bigger cut up front compared to other devices. The "subsidy" up front to consumer will eventually be recouped over the two year contract.

You may prefer the subsidized model but most of us simply disagree and we believe this business model is bad for consumers. Just do a little shopping against European and Asian market and you will see they pay lower monthly fee with better service.

I shouldn't care since I get my Verizon unlimited everything paid for by employer anyway. I just have to get my phones on my own.

 

[openwheel]

This is so totally wrong I don't know where to start.

That's because you can't.

 

[blairharrington]

You just don't get it. The article merely tells you Apple takes a bigger cut up front compared to other devices. The "subsidy" up front to consumer will eventually be recouped over the two year contract.

You may prefer the subsidized model but most of us simply disagree and we believe this business model is bad for consumers. Just do a little shopping against European and Asian market and you will see they pay lower monthly fee with better service.

I shouldn't care since I get my Verizon unlimited everything paid for by employer anyway. I just have to get my phones on my own.

The link I provided shows how absolutely wrong you are in post #41. It completely contradicts you. Not only that, you have the balls to talk down to me like I'm the idiot here.

I'm no fan of subsidies if it means costly monthly plans but at the same time most American consumers will never pay $400 or more for a smartphone. Supporting T-Mobile isn't going to do shit to change that or anything else.

 

[openwheel]

The link I provided shows how absolutely wrong you are in post #41. It completely contradicts you. Not only that, you have the balls to talk down to me like I'm the idiot here.

I'm no fan of subsidies if it means costly monthly plans but at the same time most American consumers will never pay $400 or more for a smartphone. Supporting T-Mobile isn't going to do shit to change that or anything else.

You think Googling for an article online proves you right? I see your CNN Money article and I'll raise you a WSJ and FoxBusiness. My linked articles directly supports my claim, while your article side steps yours.

Too bad for you, I got the balls of steel and I am a straight shooter.

Instead of thinking you know what Americans will or will not pay up front for a phone, why not let the market decide instead? I never said I "support T-Mobile". In fact, I don't even pay for cellular service myself. I just see the subsidy business model a bad one for the consumers. Quite frankly I don't really care if you get the point we are trying to make, but it's very difficult for you to try to go against the current to prove something.

Except for those who sign a contract, take the shiny new phones and then bail on the carrier, then the consumer wins (assuming one does not care about one's credit history). That's another story.