should phones be seperated from service providers?

[rudeguy]

I like to think I have a unique insight into this question since I worked in cellular for so long. The companies always told us that their biggest expense was equipment. They weren't talking towers or radios or test drive vans...they were talking handsets.

Now the most common customer complaint I hear is that handsets are locked down or their particular provider doesn't offer the handset they want.

Why not separate the two? I know Google made a feeble attempt at this, but why don't the providers get on board? Go back to simply selling phones that manufacturers distribute to them. No more Tmobile or Verizon exclusive phones. The providers could focus 100% work on PROVIDING SERVICE. If they want to have their own app store or app pack available for download, great.

This would dramatically cut the providers' biggest expense and give the customers what they want. It would even save the manufacturers costs by allowing them to make one GSM model and one CDMA model. Going deep instead of wide is always a smart business plan.

Where is the flaw in my thinking?

 

[vshah]

the up front cost of a phone matters a lot to people. i doubt you'd see the kind of smartphone adoption we are seeing if everyone had to shell out $4-600 for a phone. smartphone adoption drives data plans which make the carriers $$$$

 

[Gooberlx2]

Having handset exclusivity has the potential to draw masses of customers from one provider to another. The iPhone proves it, as does Droid. So providers have incentive to make those exclusive agreements with manufacturers for flagship handsets.

Also since handset prices wouldn't be subsidized, you'd see a lot fewer people buying in to contracts and features, which is where the providers make their money. I, for instance, don't need a smartphone, and certainly couldn't buy one without the subsidized price. Then I'd also go without unlimited data and messages. And since I'm not in contract, nothing stops me from switching to another provider at the slightest irritation.

I agree the idea is nice from a consumer freedom standpoint, but has its own set of cons.

 

[Fingolfin269]

the up front cost of a phone matters a lot to people. i doubt you'd see the kind of smartphone adoption we are seeing if everyone had to shell out $4-600 for a phone. smartphone adoption drives data plans which make the carriers $$$$

If people bought their own phones the carriers should be able to charge less for service since they are no longer absorbing some of the cost. $10-$20/mo less or so perhaps?

 

[Anubis]

yes, also networks should be transparent, i should be able to buy any phone i want and then get service through any provide i want without a contract

 

[Bateluer]

I would agree with this, but it won't happen. Even though its cheaper in the long term to buy a phone at full price and go contract-less, people see that 600 dollar price tag and shy away.

 

[Suspicious-Teach8788]

I agree that phones should be separate, but I have no problem with contract pricing.

The problem why this model fails in the US is because we have 4 fucking networks that don't interoperate.

AT&T uses 850/1900
T-Mobile uses 1700/2100 and it's not the worldwide 2100

Everyone wants branded phones, Sprint will never let you activate a VZW phone on its network and probably vice versa.

If you had interoperability, then subsidized or not goes out the door.

I have no problem with subsidized pricing to draw customers in, but the model every other country uses is that you can bring your own phone due to the whole SIM card feature of GSM. This allows me to STICK with AT&T and bring whatever phone I want to whenever I want.

As for the OP's talk about Google's feeble attempt, it was an attempt, but honestly who talks about unlocked phones in the US? Not many people. The Nexus One worked far better overseas than it did in the US.

I do agree that sticking to service only will allow manufacturers to focus more on their networks. Right now VZW, AT&T and the rest are spending huge amounts of money so you can go get an EPIC 4G or a Droid or an iPhone or whatever the fuck you need your next phone to be called because here in the US we want some crazy show stopping name or else we won't buy. Omnia i8910 won't do. You need something like Fascinate, Captivate, Droid Incredible, EVO, enV Touch, etc to go buy one. As a result service providers shell out huge bucks to get you the phone you want for a low price... If all that money could go into networks, I'd be a lot happier.

There was a time for huge phone subsidies and that was when the mobile market was just growing. Now we're past that, but people expect FREE smartphones, $100 smartphones, $200 smartphones, when clearly the market price for these things is close to $600. Now how the hell do you want AT&T to absorb $400 of your iPhone? Crappy network? Ch-ching. But don't point fingers at AT&T alone. What happened to Verizon? Their reliability and speed have fallen off in PC World's latest tests. To say that trying to get everyone a $150 or $200 smartphone isn't hurting is just false. Everyone used to talk about how VZW would be 4G ready in 2010 and laugh at AT&T. No one's really crying about 4G at the moment. I'm betting some timelines had to get pushed back.

 

[cronos]

Yes.

Edit:
I'm too lazy to type a paper about why the elimination of subsidy can only be good for the customers (and in the end good for the carriers too, if they're not super greedy). If I really wanted to I can probably dig up my posts at HowardForums from ~5 years ago campaigning like mad for this and combined them all. Most of my arguments however are pretty much covered by the other posts in this thread so I don't really need to