[ytrewq]

There's no question that, in the US until now, the subsidies gave customers strong incentives to (a) get a new phone every couple of years (because you were already paying for it through higher voice and data charges anyway), and (b) get a flagship phone (because the subsidies meant the flagship phones were only a couple hundred dollars more than the bottom-tier phones).

This system and its incentives have been a huge reason that the iPhone has had such a high market share. There have been numerous statistical analyses done that show that there is an extremely high correlation between the rate of subsidization in a country and iPhone's market share in that country. Eg., iPhone market share heavily depends on carrier subsidies Since the US has, until now, had a high rate of subsidies, Apple has had a high US market share.

So, as subsidies go away, iPhone market share takes a huge hit.

I don't think it necessarily follows that Windows Phones will get much of that market share. I would assume that Android would benefit the most, but it is the other big player in the market. At least in the short term.

I do see one scenario in which Windows Phones benefit significantly. As iPhones lose market share, most of that market may go to Android, but some will go to Windows Phones. As Windows Phones gradually inch up in market share, and as iPhones gradually inch down, developers have more of an incentive to make apps for Windows Phones. And if Microsoft does a decent job making it easy for developers to port Windows 10 apps to Windows 10 mobile, the app delta fades. Which is one of the main reasons people have stayed away from Windows Phones. That could have significant long term consequences.

[HillBillJr]

If you buy your phone outright, you pay less on the plan.

[rhapdog]

You don't have to make a "down payment" at T-Mobile to get a phone. And you're acting like people don't already know that an iPhone costs $600+ before they buy it. Everyone in the U.S. knows that Apple phones are expensive, nobody flinches, nobodies shocked.
You're not getting it, this is exactly the way it still works. You pick out a phone, they tell you how much you will pay monthly on it, and then they explain that if you terminate your contract, the money owed on the device is due immediately. Nothing has changed.
A flagship phone a T-Mobile is about $20 bucks tacked onto your monthly bill, and they do not charge you interest on the device. You're making this out to be something that it's really not, unfortunately.
The overwhelming majority of Americans are going to continue buying their phones from their carrier, I promise you.

This thread is about ending subsidies in the US. T-Mobile did that over 2 years ago, yet we're just now considering subsidies in the US to be going away. T-Mobile is still a minor player, though they have shaken up the industry somewhat.

The thing is, the number of T-Mobile subscribers is still very much a minority. With the big 2, Verizon and AT&T, many people will be making a down-payment on flagship phones, and they will have to pay the taxes for said phones up front, at least at AT&T. 7% tax on a $600 phone is $42. Some places tax is a bit lower, many places it is much higher. Add that to a $50 down-payment, and then a $20 per month added payment, and people who are in the low-income end of the spectrum (read, most Americans) will think long and hard about getting an iPhone.

People with better credit (read, those with more money to start with) usually don't have to make the down-payment. Those people "usually" can afford the iPhone anyway. It's not going to affect them even if they had to make the down-payment.

Exactly, and this is pretty much how it works on contract, especially after the carriers started prorating the ETF. Even if you wanted to buy a phone outright, for some flagships it was actually cheaper to sign a new 2 year contract, get the subsidized phone, cancel the contract, and pay the EFT, than to buy the phone outright. As long as consumers are going to continue walking into carrier stores, which I'm quite certain they will, they will not save any money this way.

You never save money and never have saved money buying a phone in a carrier store. Most people aren't good with their money. Look at the shape of the economy. Everyone seems to be in debt and can't get out.

I thought the ruse the US carriers were doing, was charging the same monthly service charge (including subsidy), and the same up front cost, for both midrange and high end cost phones? Which is what drove US consumers to the high end, the likes of the iPhone, because it was seen as a better deal?

Exactly.

One point people are missing is that with the contracts of the past, the carriers only listed the "monthly payment" as visible. They never listed the full price, and you had to outright ask or dig deep on the website to find it. It's been a bit more transparent for about the last year, but you still have to ask when you go into the store, at least at AT&T.

With full purchase now going to be one of the preferred options, along with Next, etc., more people are going to see the full price the carriers charge for the first time. Yes, many people already know. What a lot of people don't realize is that the full purchase cost at the carrier is in many cases higher than buying the unlocked version from another dealer.

Carriers are now having to adjust the prices of their phones. I remember looking at a particular smart phone a few years ago, and it when I inquired as to the full-purchase price with no contract at an AT&T store, I was told it was $699. I found the same one manufacturer unlocked, new on Amazon for $499. Such was the case with most all their phones.

Lumia 635 was $99.99 at the AT&T store, and $49 at Walmart. I bought one for $39.99 and one for $35.00, new. AT&T was over-charging.

Now, with the new plans in place, and with all the carriers ditching contracts, I see the the Lumia 640 selling for $79.84 at Walmart, and $79.99 at AT&T. Coincidence? I've never seen AT&T sell the same phone at a matching price before. Why is that? They know with the competition and with full price of phones being so highly visible that they will have to start pricing competitively. I believe with the "contracts hiding the price" by just telling them how much per month they will pay, they felt it was easy to gouge the public, and they were right.

I believe, whether great for Windows Phone or not, it will be great for the consumer, period. I think perhaps this in combination with a number of other factors that Microsoft has been working hard to put into place, the Windows Phone market will begin to improve in the US within about another year or so.

[tgp]

With the big 2, Verizon and AT&T, many people will be making a down-payment on flagship phones, and they will have to pay the taxes for said phones up front, at least at AT&T. 7% tax on a $600 phone is $42. Some places tax is a bit lower, many places it is much higher. Add that to a $50 down-payment, and then a $20 per month added payment, and people who are in the low-income end of the spectrum (read, most Americans) will think long and hard about getting an iPhone.

Agreed. This is how it SHOULD work, logically speaking, but somehow I don't see it changing much, if any. For one thing, carriers, including AT&T and Verizon, have been moving away from contracts for several years already. The only difference is that now a contract is not even an option. They certainly know the sales numbers on the phone sales by price level on Edge/Next vs. 2 year contract. Whether or not the level of phone goes down, I'm sure their profits go up. Of my friends/family/acquaintances that I've noticed, I haven't seen any move away from iPhones or flagship Androids since no longer using 2 year contracts.

It would be interesting to see the ratio of iPhone and flagship Android sales on contract vs Edge/Next. I'm sure the carriers know this.

You never save money and never have saved money buying a phone in a carrier store. Most people aren't good with their money. Look at the shape of the economy. Everyone seems to be in debt and can't get out.

Exactly. I don't think anybody is arguing this. But I still don't think anything is going to change. We will continue to not be good with our money, to be in debt, and not get out.

I believe, whether great for Windows Phone or not, it will be great for the consumer, period.

I don't agree with this. If moving away from contracts was going to hurt the carriers, they wouldn't do it. Yes, T-Mobile has been shaking up the industry, but at the same time Verizon and AT&T are adding customers at record levels. They're not hurting in that regard.

I don't say all this to create a big argument. I fully agree with what you say in that it makes sense; it is how things SHOULD work out. But WILL it? That's what I don't believe will happen.

If the world were logical, men would ride side saddle instead of women.

[rhapdog]

Of my friends/family/acquaintances that I've noticed, I haven't seen any move away from iPhones or flagship Androids since no longer using 2 year contracts.

I have noticed several people, probably only about 1 in 10, who have indeed moved to lower-end phones, and about half of those went to Windows phone when deciding not to do contracts any longer. These numbers are only from the people I've noticed, and don't represent a proper cross-section of the American buying public, as I live in a small, remote area to start with.

I don't agree with this. If moving away from contracts was going to hurt the carriers, they wouldn't do it.

I didn't say it would hurt the carriers. I don't believe for one second it will hurt the carriers. I said it would help the consumer. I believe it can help both the carrier and the consumer. It helps the carrier by making things simpler. Having a more transparent, simpler method of selling phones and services, by separating the selling of the phone from the actual phone service, can help to lower the cost of operations for the carrier by making them more streamlined and efficient. Making the carrier more efficient will help the consumer once the carrier realizes the savings and passes those savings on to the consumer in order to be more competitive, which will increase their customer base.

It's going to help both consumer and carrier. That's the way capitalism is SUPPOSED to work.

If the world were logical, men would ride side saddle instead of women.

Yeah, got to agree with you on that one. Here's some free advice. Don't wear boxers while riding a horse. Especially at full gallop.

[Doohickie]

We'll see what WP10 brings in terms of hardware. I just switched phones and I was leaning toward an Android anyway (my last WP8 was my first smartphone and I just want to see what else is out there), but when I looked at phones available through my provider (AT&T), they aren't carrying anything that competes right now. The Microsoft/Nokia phones they offer are a lot closer spec-wise to my old HTC 8X than they are to any of the latest offerings for Android phones.

When I compared the WPs they had to similarly spec'ed Android phones, they were roughly the same.

So I'm not sure the assumption that WPs will stack up well against Androids cost-wise is a good one.

[Doohickie]

Exactly, and this is pretty much how it works on contract, especially after the carriers started prorating the ETF. Even if you wanted to buy a phone outright, for some flagships it was actually cheaper to sign a new 2 year contract, get the subsidized phone, cancel the contract, and pay the EFT, than to buy the phone outright. As long as consumers are going to continue walking into carrier stores, which I'm quite certain they will, they will not save any money this way.

As much as your entire post goes against how things "should" work, I agree with you 100% that this is how the carriers' plan changes will spin out. I do not think that habits are going to change at all, at least not measurably.

Not in the beginning, but I think eventually people will separate phone and carrier.

[tgp]

Not in the beginning, but I think eventually people will separate phone and carrier.

Possibly. I guess we'll find out!

Another possible benefit to consumers is that flagship prices may start falling. Apple depends entirely on high prices, and Android OEMs do too to a lesser extent. If sales start dropping, they'll be forced to drop their prices.

Sent from whatever device I happen to be using today using Tapatalk

[Doohickie]

Possibly. I guess we'll find out!

Another possible benefit to consumers is that flagship prices may start falling. Apple depends entirely on high prices, and Android OEMs do too to a lesser extent. If sales start dropping, they'll be forced to drop their prices.

Sent from whatever device I happen to be using today using Tapatalk

When I switch from my phone subsidize plan to my bring-your-own plan, I save $25/device (four in my family). My wife and sons are content with their phones. My phone, an LG G4 (their flagship) is $21/mo. Even with a flagship I'm paying less.

So when people switch from the subsidized plans I think they may actually opt for *more* flagships because they can get a better phone than they used to have for no additional money out of pocket every month compared to what they're already used to.

[Laura Knotek]

Possibly. I guess we'll find out!

Another possible benefit to consumers is that flagship prices may start falling. Apple depends entirely on high prices, and Android OEMs do too to a lesser extent. If sales start dropping, they'll be forced to drop their prices.

Sent from whatever device I happen to be using today using Tapatalk

It'll be interesting to see if this lowers the price of Samsung devices. There is a lot more competition in the Android world from Xiaomi, Huawei, ASUS, OnePlus, Moto, LG.

[Visa Declined]

Americans, whether rich or poor have always had access to high end phones, the carriers have enabled this. Nothing will change in the future, there will always be "Get an iPhone now for $0 down" plastered across the windows of carrier stores. That's really the bottom line here.

Americans who have destroyed their credit, or are really scraping to get by go to Cricket, Boost Mobile, etc. Those places sell a lot of cheap, unsubsidized phones.

[GreenScrew]

On Verizon today you can choose a Lumia 735 for $8/mo or an iPhone 6 for $27. $20/mo for 2 years. That will get some people thinking. Not all, but some... and particularly when getting a phone for our children I think. My wife is very content with her 735 (happier after I added a red back cover). Its quite adequate, and very affordable.

[tgp]

Ah, that reminds me of another factor that I forgot to list in my optimistic predictions: flashable WP10 ROMs for Android phones. It all adds up. Hopefully to a positive number.

Most people don't even know how to manually add or remove stuff from their home screens. Who, besides a few technically minded fans, are going to flash a WP ROM on their phones?

[tgp]

Millions! After an Android worm demonstrates that Andoid's update model is not sufficient. There, I found another reason. Sheesh, what will it take to bring you guys back to Team Positive?! :)

Positive? Sure. Delusional? Nope! You're being smart... and logical. Those 2 qualities don't necessarily apply to the general public.

Windows and Android are the 2 operating systems that come to mind when we talk about (lack of) security. This reputation has hurt them so much that they're at 95% and 85% market share respectively.

[Laura Knotek]

Most people don't even know how to manually add or remove stuff from their home screens. Who, besides a few technically minded fans, are going to flash a WP ROM on their phones?

Millions! After an Android worm demonstrates that Andoid's update model is not sufficient. There, I found another reason. Sheesh, what will it take to bring you guys back to Team Positive?! :)

More people would probably flash Cyanogen than anything else.

[rhapdog]

More people would probably flash Cyanogen than anything else.

And Android owner with the technical know-how to do the flashing would probably go with Cyanogen, yes. Personally, I think the only ones that will be flashing Windows 10 on Android Flagship phones in the future will be Windows 10 enthusiasts who are adept at flashing, and that windows enthusiast wants to purchase the flagship for the express purpose of putting Windows 10 on it. I don't think people are going to buy Android and then decide, "Oh, I think I'll change to Windows 10, because it's better." The average person will simply purchase a phone with Windows 10 already on it if that's what they want.

[rhapdog]

More people would probably flash Cyanogen than anything else.

And Android owner with the technical know-how to do the flashing would probably go with Cyanogen, yes. Personally, I think the only ones that will be flashing Windows 10 on Android Flagship phones in the future will be Windows 10 enthusiasts who are adept at flashing, and that windows enthusiast wants to purchase the flagship for the express purpose of putting Windows 10 on it. I don't think people are going to buy Android and then decide, "Oh, I think I'll change to Windows 10, because it's better." The average person will simply purchase a phone with Windows 10 already on it if that's what they want.

[harmon rabb]

I think if the phone stores stuck an $80 lumia 640 in front of people and had them try it vs a $600 apple/samsung, and people were aware of those prices, Windows phone could pick up market share.

I have a s6 on one line, a lumia 640 on the other, and I still can't believe how good the 640 is. It's definitely not on par with the s6.. But the s6 sure isn't worth eight 640s.

And hilariously in some ways, the 640 is better. It never lags. It never fritzes out. The battery easily lasts 3x what the s6 battery does.

[lparsons21]

I've been reading here and there, and there are good points made in this thread. But until there are more models across a size/price available at more carriers, the problem won't go away. Today I went into a Verizon store, a Lumia 735 and an LG Lancet were the only ones there. At $192 and $120 respectively that isn't bad. Then I went to the ATT store, they only sell the 640XL for $249. Sweet phone, but ATT is missing some lower priced ones and Verizon is missing a bigger one. That's NOT the way to sell Windows Phones!

Add in that the Verizon sales droids all push away from WP. T-Mobile has some low end WP and I'm sure some of the others do too. But it seems none have a good selection at all.

[falconrap]

This isn't really that easy of a call either way. An iPhone 6 is, at Verizon $0 down for QUALIFIED customers. There are a lot of people who don't qualify for these $0 down plans. Those folks then have to pay a down payment on the phone, plus the sales tax on it. When that happens, and you see a Lumia 640 sitting there for well under $100 outright...there may be a few more folks who go that route. Quite frankly, a slight up tick of a couple percent of people would make a noticeable dent in market share. Add in those who will finally buy again with new flagships coming out for WP, and maybe we might see something around 5% by the end of next year. Hard to really tell, but it will be harder for people to ignore Windows Phones when they see some of the benefits and familiarity that they come with.

I'm cautiously optimistic that we'll at least see a nice uptick in the market share here. Worldwide, I think the new flagships will help to drive a lot more sales in Europe, India, and South America, and that this could end up pushing WP over the 5% mark in total worldwide market share which could start the snowball. We'll see.

[lparsons21]

While I'd love to see WP get some more market share so that it becomes more viable for the developer community to provide more apps and certainly more specific corporate/gear apps, the problem remains that there are fewer new models of WP in total and each carrier only wants or has one or two of them at any given time.

With the dropping of subsidies the reasonable expectation should be that all WP phones should be unlocked and made to work on all carriers. Isn't that the way it is outside of the US? The US market is the way it is because of the way phones were packaged by the carriers with subsidies. The carriers all bragged about the no-cost phone, yet that wasn't what they ever had. From day one, we the consumer paid for those phones in total. Either hidden in the subscription and fees, or with one or the other programs such as Edge. I even did a little math and it turns out that the cost to have the service and the phone, regardless of how it was structured, is nearly the same whether you buy the phone, lease the phone or had all of it buried in contract deal.

I'm looking for a WP and am very frustrated. My choices are as follows, none of them ideal:
1. Stay with Verizon which is the best service for me and get one of the small WP they are peddling.
2. Stay with Verizon and play the ebay crap shoot for a bigger WP
3. Move to another carrier if they have a WP that I like. ATT has the 640XL which would meet my needs, but their service is not quite so good here.
4. Move to some smaller carrier, but that's not so good when you live in the boondocks!! :( Tmobile has recently gotten their high speed data in parts of the local area, but in a big part of this area they have no coverage at all.

Staying with Verizon has the benefit of the lowest out of pocket up front costs. Moving means paying off Edge on the iPhone 6+ and the cost of the new phone.

[rhapdog]

Moving means paying off Edge on the iPhone 6+ and the cost of the new phone.

See if you can find a buyer that will cover that cost. Only advice I have right now. I won't make a suggestion that might turn out to be the wrong choice for you. I also live in the boondocks. Luckily, it's an area where AT&T has solid coverage. Verizon is rather stable, but not as much as AT&T in my particular area. Forget T-Mobile and Sprint where I live. No network for miles around.

[lparsons21]

Thanks for the suggestion and I had thought about just paying off the iPhone and peddling it on Ebay, but that's not such a good idea imo. I use a couple banking apps and my finance manager on it and those apps are not available on a WP unfortunately. I gave serious thought to getting a Lumia 640 Go Phone as it meets my needs/wants for a bigger screen, and it certainly is well priced. I could get it and the $30/month plan that has no data and use my Verizon data via personal hotspot or wifi. That actually would work fairly well.
Hmm.... I just did some math.
640+30 plan over 24 months amortization is $33/month
735+20 fee over 24 months amortization is $28/month
So I could have one number on ATT, one on VZW and the penalty is $60 total over 2 years.
Now need to read up on the 640.
For some reason your post made me do some thinking out of the box a bit. Thanks!! :)

[welsbloke]

The concept of separating the cost of the phone from the contract will not stop people from buying phone from the provider it will though make the cost more pronounced. Currently in the UK the majority of phones are purchased with a contract and its true cost hidden. If they cared to pay attention they would see the cost hidden in the contract but they in my opinion rarely look. However splitting the cost of the phone from the contract which is also something which is beginning to happen in the UK will almost certainly make folks consider the cost of the phone this is after all the result of transparency. Will this affect high end devices, sure it has too will the Windows Phone benefit maybe but to be honest it stands a better chance of a surge through the universal windows 10 programme.

[eshy]

Once in a while I meet people with a 2.5-3 year old iPhone on a subsidized plan who won't upgrade because they don't want to spend the $200. They're always shocked when I explain they're still paying $25-30 every month for the phone and the longer they wait the more they actually pay for that phone.

People are generally clueless about phone prices, even tech writers don't always get it (remember when that CNET "journalist" compared the $100 iPhone 5C and $100 Lumia 520?)

Now that US carriers are moving away from subsidized phones I think a lot of iPhone owners will get a sticker shock and complain about Apple raising prices. I'm sure some of them will go looking for alternatives in the midrange but many will just get on the payment plan since the total monthly cost will stay the same.

T-Mobile has made that change a while ago, they're still selling lots of iPhones