Verizon's changing plans (unsubsidized phones) could help Windows Phone / Windows Mobile

[onlysublime]

Verizon is still the biggest and most powerful carrier in the US. With them getting rid of subsidized phones, this might actually help out Windows Phone. Subsidized pricing disguised the true price of high end iPhones and Android phones.

I think it will indirectly help out PCs as well. Because now people will see a $600 iPhone compared up against $200-300 PCs. Or against a $500 Surface 3.

It was hard for many to justify buying a low-end free Windows Phone when you could get an iPhone for $50. A $200 Galaxy S6 looks so much better than a no-contract $200 Lumia 735. I know a lot of lower income individuals who stretch to get the iPhone or Android phone because the subsidized pricing looks enticing. But once the phone is no longer subsidized, they will directly see the cost and it will go beyond their ability to stretch.

Maybe this will cause Microsoft to realize that low cost phones are a good strategy. In most of the world, phones are unsubsidized so people are much more price sensitive than in the US. I think this is why Windows Phone has pretty good marketshare in many foreign countries. With Verizon, T-Mobile, and AT&T going to unsubsidized phones, Windows Phone has a good shot of at least 10% marketshare (assuming there are still budget phones around).

 

[theefman]

The price can be spread over a number of months and in fact telling people you can get a high end phone for just $20pm (which is what they will most likely display in store) might entice even more to buy one. At the end of the day, people want high end quality device, if MS continues to produce low end crud they will continue to be ignored. Not going to be beneficial to WP specifically in any way.

 

[tgp]

I doubt this move by Verizon will make any noticeable difference in sales of the iPhone vs. the others. Verizon will still finance the phones, which essentially has the same effect as a 2 year contract. You can still walk out of the store after paying little to nothing down, and have a higher monthly bill. The difference is that you can see exactly how much it costs. Will this make any difference to the vast majority of iPhone users? I doubt it.

If it does cut iPhone sales, WP won't necessarily be getting them instead. Android has some low to mid range phones of very good value. It's not like WP owns this department.

 

[onlysublime]

Now, the changing of the plans may merely be for backend stuff. Right now, their sales reps may the bulk of their income via contracts (low base salary but high commissions and bonuses via signing people to contracts). I know some sales representatives who left T-Mobile because of their "no contracts" plans so it was no longer financially good for the reps since they would be reduced to a low base salary.

And Verizon can hide the subsidy just like how T-Mobile hides subsidies. You can hide subsidies through things like sales and discounts.

However, in the current system, it is to your benefit to pay for the high-end phones since Verizon and other providers pay for the bulk of the phone. The cost of data and voice is near constant so it is almost foolish to go for a low-end phone in the current system. If they are truly going to a subsidy-free model, then the entirety of the phone is passed to the consumer.

I know i buy the high end phone because i can afford it and because I know that Verizon pays for the bulk of the phone. Why would i go to a low end phone when Verizon offers to pay for the bulk? But under the new model (assuming they don't replace regular subsidies with sales and deals), that could very well shift a chunk of the population. We're not talking monumental shifts. We're talking noticeable shift albeit small.