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08-25-2015 01:25 PM
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  1. realwarder's Avatar
    Some will get on a payment plan but some will wake up to the true cost of the iPhone.
    08-23-2015 04:38 PM
  2. sweatshopking's Avatar
    subsidies aren't going anywhere, and even if they were, it'll mean jack for WP.
    theefman likes this.
    08-23-2015 05:48 PM
  3. Joe920's Avatar
    Phew, glad we got that settled! #endofthread
    Doohickie likes this.
    08-23-2015 06:40 PM
  4. HeyCori's Avatar
    As others have pointed out, customers are easily duped into signing a contract. In America we sign contracts without bating an eye. It's like we are not adapt at evaluating long term costs. When that AT&T rep asks, "Do you want to pay $0 for the 16GB iPhone 6 Plus on Next or pay $300 subsidized?" people focus on that $0 and go blank about anything else.

    I've seen tons of people that pay $100+ a month for service and they don't even flinch. That's "normal." They don't consider that at $100+ a month, they've paid for their device several times over.

    I understand where the OP is coming from, it makes total sense that the carrier's new pricing plans would drive people to cheaper phones. However, carriers are great at hiding costs. I just tried this out at AT&T:

    iPhone 16GB iPhone 6 Plus + Next + 2GB of data = $52 down / $80 a month
    iPhone 16GB iPhone 6 Plus + 2-year contract + 2GB of data = $321 down / $70 a month
    (the down payment includes taxes and other fees)

    That's an easy pitch for a sales rep. Pay $321 up front, or get the same phone/service for $52 up front and a measly $10 extra a month? People aren't even going to think twice about that $52 before signing up.

    You might be thinking, isn't $80 a month for 2.5GB of data a terrible deal? OF COURSE! And going up in the data tier doesn't get any better but that hasn't stopped people from paying.

    So no, I don't think moving away from subsidizes is the shot in the arm that WP needs.

    I'm going to go in a different direction and say that it would be more beneficial for WP (and customers in general) if they move away from the big four and switch to MNVOs. It's mindboggling that $100+ a month for one device is considered acceptable. I'm on Cricket (which is technically owned by AT&T) and I'm on the cheap 2.5GB plan. On AT&T, that plan is $70-$80 bucks. On Cricket I pay $35.

    More people need to realize that they're paying too damn much. I understand that some people live in areas where they're forced to stick with the big four, and that sucks. However, better deals are out there and people should take advantage of them. I think once people analyze their monthly costs, suddenly cheaper phones on different carriers doesn't seem like such a bad idea. Granted, that would require a monumental shift in how the public thinks about their cell phone and plan.
    Last edited by HeyCori; 08-25-2015 at 09:48 AM.
    Laura Knotek, libra89 and rhapdog like this.
    08-24-2015 12:36 AM
  5. Beantool's Avatar
    This was the best read I've had on these forums in some time. Thank you OP and all subsequent contributors.
    08-24-2015 01:00 AM
  6. falconrap's Avatar
    What I do think people are forgetting is that, in the past, when you paid a contract, you always paid the same amount no matter the cost of the phone, with the down payment being the sole differentiator. Even once the contract ended, and the phone was clearly paid off, you still forked over that same amount. Now the cost of the phone service, is separated out. You pay the difference between phone models in the subsidy. In situations where people are tight on money, and $10-15/mo means something to them, they'll opt for the cheaper phones, and Microsoft can pick up quite a few there. Right now, this is probably the one area that they are doing best in in the US. They need flagships that people want, however, to really move the people that have more money. This is where the only chance at significant growth comes in.
    08-24-2015 05:14 AM
  7. tgp's Avatar
    What I do think people are forgetting is that, in the past, when you paid a contract, you always paid the same amount no matter the cost of the phone, with the down payment being the sole differentiator. Even once the contract ended, and the phone was clearly paid off, you still forked over that same amount. Now the cost of the phone service, is separated out.
    By the end of a 2 year contract it is normally high time to be replacing a smartphone. I doubt whether many smartphone users go much past the 2 year mark without upgrading. Some do of course, but probably not a high percentage.
    Laura Knotek and libra89 like this.
    08-24-2015 09:01 AM
  8. falconrap's Avatar
    By the end of a 2 year contract it is normally high time to be replacing a smartphone. I doubt whether many smartphone users go much past the 2 year mark without upgrading. Some do of course, but probably not a high percentage.
    Yes. But when I got my Icon via Edge on Verizon, the wireless plan itself was notably cheaper than the contract plan I have. Then I could either use my current phone, or purchase a phone via Edge, which is what I did. Still had to put money down for it. The Edge subsidy is separate of the contract price, and the contract price is now cheaper than it used to be to reflect the separation. If they were still charging the same, I could see the point being made, but they aren't. My total bill actually went down slight due to the Edge discount on my service plan. I was paying like $5 less per month total (Edge and service combined).
    08-24-2015 07:20 PM
  9. lparsons21's Avatar
    I like the way Verizon is doing it now.
    Each phone is $20/month - unlimited talk/text and a bunch of other 'services'
    Data is seperate - I'm on the Medium @$45/month shared, 3Gb.
    Cost of phone is seperate. I could either bring my own, buy one for full price and pay either on Edge or in full. I like that!

    Access and data w/o taxes and fees with my military discount is $58.75/month. I can double the data for $15 more. While that isn't the cheapest of deals, it is pretty darned good.
    08-24-2015 08:43 PM
  10. Doohickie's Avatar
    That said, I do wonder how much MS is working with manufacturers to help them offer two flavors of the same device, Android and WP10.
    I don't think MS is doing much of that at all. I think that's why they bought Nokia smartphones, so they wouldn't have to mess with that. They have an in-house HW division, why do they care about other HW providers? (i.e., typical MS hubris)
    Last edited by Doohickie; 08-25-2015 at 09:22 AM.
    08-25-2015 08:53 AM
  11. Doohickie's Avatar
    it makes total sense that the carrier's new pricing plans would drive people to cheaper phones.
    I still disagree.with this premise. I think it's quite the opposite. Under the "subsidized" model, a person paid much more than their phone was worth over the 2-year contract.

    For instance, on my new plan, I get a $25 discount for each phone that's not on a 2-yr contract. I fully financed my LG G4 (their current flagship) for $21 per month. So going from an older WP that was nothing special at the time (HTC 8X), to a flagship, results in a net savings per month for me. I think when the average person sees they can get more phone for the same or less money, they'll go with the better phone. They're already used to a payment of X per month, and can get a much better phone for the same monthly cost? Yes, please.

    Had this happened, say, 6 or 7 years ago, I think more people would go with the cheaper option out of necessity. But the economy is not in freefall; it's much more stable now, and phones are one way people display status.
    HeyCori likes this.
    08-25-2015 09:16 AM
  12. rhapdog's Avatar
    I don't think MS is doing much of that at all. I think that's why they bought Nokia smartphones, so they wouldn't have to mess with that. They have an in-house HW division, why do they care about other HW providers? (i.e., typical MS hubris)
    They care very much about other hardware providers. Ever notice how Microsoft only puts out ONE line of tablets? The Surface? You've got the Surface and Surface Pro. Microsoft has set a standard for manufacturer's to look at for what Microsoft envisions a tablet should be. Then other vendors go and produce what they do for Windows tablets.

    Recently, Microsoft announced they will be doing the same thing with phones. They will be only producing 3 models in the future. Consumer, Business, and Flagship. It will be up to other hardware vendors to populate the other niches with Windows Phones of their own design. Many hardware manufacturers are already designing new phones for Windows 10, and many of those are going to produce the same or similar phone for both Android and Windows 10. When you have the same phone available with both OSes, we might just see how Windows 10 will truly stack up against the competition. Of course, Nexus won't get a Windows 10 version, as it's produced by Google. Samsung is considering the Windows 10 versions, but have not yet committed. A number of hardware vendors have already committed.
    libra89 likes this.
    08-25-2015 09:41 AM
  13. Doohickie's Avatar
    That would be good for the OS then. But my sense is that MS makes it possible and pays lip-service, but... I don't know. And for the HW providers other than Nokia, the WP will probably be viewed as a minor player for some time to come. Who knows, I could be wrong.

    I liked the OS when I first got my WP. Easy to learn, easy to make do what I want, etc. If they address the app gap and capabilities are similar at a given price point to Android, I'll probably take another look at WP when it's time for a new phone. My WP that I recently replaced was my first smartphone, and I somewhat deliberately chose an Android this time to see what else is out there. I don't plan on trying iOS simply because I've never really been an Apple fan. So when I replace my Android I'll compare Android against WP and make an informed decision. One thing that would favor WP in the future is if there is greater unity with the Windows I have on my home and workplace computing devices.
    08-25-2015 09:56 AM
  14. HeyCori's Avatar
    I still disagree.with this premise. I think it's quite the opposite. Under the "subsidized" model, a person paid much more than their phone was worth over the 2-year contract.

    For instance, on my new plan, I get a $25 discount for each phone that's not on a 2-yr contract. I fully financed my LG G4 (their current flagship) for $21 per month. So going from an older WP that was nothing special at the time (HTC 8X), to a flagship, results in a net savings per month for me. I think when the average person sees they can get more phone for the same or less money, they'll go with the better phone. They're already used to a payment of X per month, and can get a much better phone for the same monthly cost? Yes, please.

    Had this happened, say, 6 or 7 years ago, I think more people would go with the cheaper option out of necessity. But the economy is not in freefall; it's much more stable now, and phones are one way people display status.
    If I'm doing my math wrong, then someone please call me out.

    So I decided to bust out the old Excel spreadsheet and compare the price difference between a $740 Note 5 on Next and Subsidized. Images are from the checkout process.

    Subsidized:
    Due today: $268 ($249+plus sales tax)
    Added to first bill: $45 (activation fee)
    Due monthly x24: $1,680 ($70x24 months)
    Total: $1,993

    Next:
    Due today: $52
    Added to first bill: $15
    Due monthly x30: $2,400 ($80x30 months)
    Total: $2,467

    So you might be thinking, well that's not fair because Next covers 30 months. That's an additional 6 months over the traditional 24-month contract. Okay, so let's factor the cost of taking a 24-month contract to 30-months.

    $70x6: $420
    $420+$1,993: $2,413

    Adjusted:
    Next: $2,467
    Sub: $2,413
    Diff: $54

    So after 30 months you're still paying $54 MORE on Next when compared to a 2-year contract. Next looks good on paper because the upfront cost is much cheaper. In the end, you're still paying roughly the same.

    As I was saying before, it makes sense that a financially savvy shopper would choose a cheaper device and save some money. But when the AT&T rep starts preaching about how you can get a Note 5 for $52 down and it's only a measly $10 extra a month, savvy goes right out the window.
    libra89, tgp, rhapdog and 1 others like this.
    08-25-2015 10:49 AM
  15. tgp's Avatar
    If I'm doing my math wrong, then someone please call me out.

    So I decided to bust out the old Excel spreadsheet and compare the price difference between a $740 Note 5 on Next and Subsidized. Images are from the checkout process.

    Subsidized:
    Due today: $268 ($249+plus sales tax)
    Added to first bill: $45 (activation fee)
    Due monthly x24: $1,680 ($70x24 months)
    Total: $1,993

    Next:
    Due today: $52
    Added to first bill: $15
    Due monthly x30: $2,400 ($80x30 months)
    Total: $2,467

    So you might be thinking, well that's not fair because Next covers 30 months. That's an additional 6 months over the traditional 24-month contract. Okay, so let's factor the cost of taking a 24-month contract to 30-months.

    $70x6: $420
    $420+$1,993: $2,413

    Adjusted:
    Next: $2,467
    Sub: $2,413
    Diff: $54

    So after 30 months you're still paying $54 MORE on Next when compared to a 2-year contract. Next looks good on paper because the upfront cost is much cheaper. In the end, you're still paying roughly the same.

    As I was saying before, it makes sense that a financially savvy shopper would choose a cheaper device and save some money. But when the AT&T rep starts preaching about how you can get a Note 5 for $52 down and it's only a measly $10 extra a month, savvy goes right out the window.
    That's pretty much what I was saying; the new model isn't really cheaper. In fact, in your example here, the contract is quite a bit cheaper. But in general the cost difference is not significant.

    I do not believe the carriers will make a move that will hurt their bottom line. Like I said in an earlier post, in some cases it was cheaper to buy a subsidized phone on contract and then cancel the contract than to buy the phone outright. The end result was the same: you own the phone free and clear, but the subsidized method was cheaper.

    Where this new model could save is that customers might be more apt to buy cheaper phones. On contract, the price difference between low cost phones and flagships was often much less than the real world cost. Even then, I don't see that happening much, as the overall price will remain more or less the same.

    What I would like to see is that the phone manufacturers sell factory unlocked phones with financing available, much like Google and Motorola already do. Provide a phone that works on all carriers, and finance it. That to me is the ideal solution to the current convoluted cell phone/carrier system.

    However, I'm not sure how well this would be received if the carriers still sell phones. It is by far simpler to walk in to the carrier store, choose a phone (or have one chosen for you ), and walk out with it fully functional. The vast majority of customers couldn't care less about their phone being carrier branded and locked, and neither do they care about updates. In fact, a lot of customers ignore available OS and app updates.
    HeyCori, libra89, Joe920 and 1 others like this.
    08-25-2015 11:20 AM
  16. tgp's Avatar
    Maybe the new MS flagship will have 'all the bands' and can work with GSM and CDMA?
    I'm sure Microsoft could do it. Apple and Google have both done it with phones released about a year ago. One device, any SIM!
    Joe920 likes this.
    08-25-2015 11:41 AM
  17. Doohickie's Avatar
    I can't follow your numbers at all, but when I did the numbers for myself, I came out with a considerable savings of about $100 per month for four phone lines in my family by ditching the 2-year "subsidized" rate on AT&T. Even with me getting a flagship phone, I'm still saving about $80 per month over what I used to pay.
    08-25-2015 12:47 PM
  18. lparsons21's Avatar
    That would be great, especially the 'all carriers' part. Now that would be good for competition! Maybe the new MS flagship will have 'all the bands' and can work with GSM and CDMA? Not likely, but hey, I can dream!
    Since we know it can be done, this is what I would like to see. I love the idea that my iPhone 6+ can be used on any carrier since I bought it as an unlocked Verizon phone. There is no technical reason that it cannot be done on any phone. Of course the carriers like to speak out of both sides of their mouths claiming the low profits (or no profits) on the actual hardware. If that is the case, if they quit selling them it shouldn't be a burden on them.

    Of course that is a pipe dream and Verizon doesn't sell unlocked all band iPhones out of the goodness of their hearts, they did it to get the additional spectrum they needed.
    libra89 likes this.
    08-25-2015 01:12 PM
  19. tgp's Avatar
    I love the idea that my iPhone 6+ can be used on any carrier since I bought it as an unlocked Verizon phone.
    It's not just Verizon's iPhone 6/6+. All of the US versions, even AT&T's and T-Mobile's, can be used on Verizon once they're SIM unlocked.The Nexus 6 is the same way. The factory unlocked iPhone 6/6+ and Nexus 6 work on Verizon as well.

    Basically, all of the US devices are the same, except AT&T SIM locks theirs (both iPhone & Nexus). I'm not sure about T-Mobile's and Sprint's iPhones, but their Nexus devices are the same as you get straight from the factory.
    08-25-2015 01:25 PM
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