Why Smartphone Subsidies Won't Die - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Comments
Why Smartphone Subsidies Won't Die
Newest First  |  Oldest First  |  Threaded View
EVVJSK
50%
50%
EVVJSK,
User Rank: Apprentice
3/14/2012 | 4:07:07 PM
re: Why Smartphone Subsidies Won't Die
It cost Apple $198. They are charging more than that to the providers in some cases, especially when the device is relatively new. If you look out there on Amazon, you can likely get a better value of many of the phones that the providers say cost $XXX without a plan. My guess would be that value is VERY close to original price for WAY too long because they want to drive people to the locked phones with data plan.
ANewNickname
50%
50%
ANewNickname,
User Rank: Strategist
3/13/2012 | 10:29:08 AM
re: Why Smartphone Subsidies Won't Die
Oops. The Verizon information I referred to above came from the local VZW store last week. Today I see that both Motorola and VZW are promising that my device (a Droid Bionic) will be upgraded to Android 4 (ICS), but there's no firm date at this time. Re the flakiness, recent VZW updates seem to have a positive effect. There may be hope.
ANewNickname
50%
50%
ANewNickname,
User Rank: Strategist
3/12/2012 | 7:25:53 PM
re: Why Smartphone Subsidies Won't Die
In the carrier-centric US, you're screwed no matter how you buy your phone. If you pay full price, you're still stuck with the same carrier forever (or at least until you've amortized the extra cost to your satisfaction). If you pay the plan price, you're stuck with the plan. In either case you pay extra for data, whether you want it or not. ( I was given a hand-me-down iPhone 3GS, which I would love to use purely as a phone on AT&T's 3G network, and only use the smarts in a WiFi hotspot, but they tell me I have to buy a data plan.) I have a flaky Android device under a Verizon plan for another 22 months, but Verizon tells me it will not be upgraded beyond its current version of the OS (2.3), so it will become less and less capable over time.

The most attractive alternative to me is to move to Europe.
EVVJSK
50%
50%
EVVJSK,
User Rank: Apprentice
3/12/2012 | 3:55:26 PM
re: Why Smartphone Subsidies Won't Die
The problem with the current system is that I pay too much for data (that is how they are recouping the cost of their subsidized phones), voice, and text. If I am happy with my 3 year old phone, but want a reduction in cost, I can't get it without dropping services. There SHOULD be a plan that allows lower cost plans if you take care of purchasing the phone yourself. T-mobile should lead the way in this as it is a way to differentiate themselves. They can still offer the subsidized plan if they want, but an unsubsidized cheaper plan should be an option.
herman_munster
50%
50%
herman_munster,
User Rank: Apprentice
3/9/2012 | 8:30:54 PM
re: Why Smartphone Subsidies Won't Die
Maybe if people paid more for their smartphones, they'd get more out of them for a longer period of time.
lacertosus
50%
50%
lacertosus,
User Rank: Apprentice
3/9/2012 | 6:10:37 PM
re: Why Smartphone Subsidies Won't Die
I honestly don't believe that phones cost that much. According to an article I read sometime ago, it costs Apple around $198 to manufacture an iPhone (parts, labor, shipping). To me, providers are turning huge profits over a two year contract by 'recovering' the supposed $600+ cost of the phone. Also, I can purchase a mid-grade Dell laptop for less than $600! Dell is not in the subsidies business and I'm not convinced that a smart phone costs more than a decent laptop with 250 GB hard drive.

Assuming the phones really cost $600 or more. In that case, wouldn't make more sense to manufacture these phones in the US rather than China? It would be much cheaper!



State of the Cloud
State of the Cloud
Cloud has drastically changed how IT organizations consume and deploy services in the digital age. This research report will delve into public, private and hybrid cloud adoption trends, with a special focus on infrastructure as a service and its role in the enterprise. Find out the challenges organizations are experiencing, and the technologies and strategies they are using to manage and mitigate those challenges today.
Commentary
Study Proposes 5 Primary Traits of Innovation Leaders
Joao-Pierre S. Ruth, Senior Writer,  11/8/2019
Slideshows
Top-Paying U.S. Cities for Data Scientists and Data Analysts
Cynthia Harvey, Freelance Journalist, InformationWeek,  11/5/2019
Slideshows
10 Strategic Technology Trends for 2020
Jessica Davis, Senior Editor, Enterprise Apps,  11/1/2019
Register for InformationWeek Newsletters
Video
Current Issue
Getting Started With Emerging Technologies
Looking to help your enterprise IT team ease the stress of putting new/emerging technologies such as AI, machine learning and IoT to work for their organizations? There are a few ways to get off on the right foot. In this report we share some expert advice on how to approach some of these seemingly daunting tech challenges.
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll