On Fri, 08 Sep 2006 11:57:47 -0600, Todd Allcock
<elecconnec@AmericaOnLine.com> wrote:

>At 08 Sep 2006 15:29:04 +0000 Steevo@my-deja.com wrote:
>> On Fri, 08 Sep 2006 07:56:49 -0600, Todd Allcock
>> <elecconnec@AmericaOnLine.com> wrote:
>> >It's a two-way street. We, as customers "demand" things like free
>phones
>> >every few years.
>>
>> No, that's not the problem.
>>
>> The problem is the carriers keep a stranglehold on the equipment,
>> keeping competition away completely.
>
>Not really- especially with GSM. Unlocked phones can be used with
>Cingular and T-Mobile, and are readily availble if you look for them.
Hardly true. There are very few places you can buy a non "fake
subsidized" unlocked phone. Ebay is one of them, but there is hardly
competition. The unlocked ones are usually lots more than the carrier
locked ones. That's the carriers keeping a stranglehold on the
equipment again.

>
>> If Walmart had a wall full of multi carrier Nokia, LG, Motorola and
>> Samsung phones at competitive prices that had no connection to any
>> carrier except being compatible technology this would not be
>> occurring.
>
>Sure it would- those "competitive prices" would be $100 and up. Most
>people would still take a free phone (and contract).
Maybe, but if you break or lose your phone lots of people would find
it better to buy one off the wall a Walmart. I wouldn't sign a
contract in order to get a phone except as a last resort.
Unfortunately that's how it's been.

Ya know, I asked Cingular if I could activate a phone on one of their
plans without a contract, without them giving me or even selling me a
discounted phone. There was no way to get that. I couldn't bring my
own. I argued that the only reason I would get a "contract" is in
order to get a phone from them, and I ought not have to have one if I
am not getting a phone. Nope. Impossible.

At the local store and by email and by chat on their site and on the
phone with their phone reps. Same story. NOPE.

Hardly sounds like an open competitive market to me.

>> They would be competing on equipment with Target, Sears,
>> online sellers, etc. Prices would decline and more reflect the value
>> of those products. How much do you think it really costs Motorola to
>> make a phone at a plant in Mexico? China? $4? $6?
>
>Wholesale costs of cellphones are much higher than you seem to think.
>Even "cheap" low-end phones wholesale for $40-50. If Walmart was content
>to have a 2% margin (and they aren't!) that would be a $41 phone with no
>frills.
Those are fake wholesale costs. If there was competition between
manufacturers without the carriers involved at all those prices would
decline due to competition.

>> And before
>> anyone brings up the CDMA/GSM compatibility argument remember the ATT
>> quad band phones? They can do it, if they wanted but they have no
>> incentive.
>
>Correct- because so few people would want or need one, that no one could
>afford to build one, especially given the short product curve of today's
>wireless market- models are replaced every six months or so.
>
>> Motorola would be selling CDMA/GSM phones on the wall at
>> Walmart if they could.
>
>What's stopping them? (Except no one would actually buy one, making it a
>failure for both manufacturer and retailer.)
As things are you are right, there is no need. Just try to get a CDMA
phone activated on Sprint or Verizon that they didn't sell. NOPE.

>> Equipment would be *much* cheaper, and you wouldn't have to sign a new
>> contract to get a new phone.
>Then why aren't phones dirt cheap in Asia or Europe? Because phones
>aren't as cheap as you seem to think.
>
>> The only purpose of the *free* phones is
>> to keep you signed up to long contracts all the time.
>
>You're probably too young to remember, but originally cellular phones
>were sold unsubsidized and without contract here in the US. The cell
>companies came up with the subsidy idea to reduce the cost to the
>customer and make cellular a mass-market item. Getting a $700 phone for
>$400 or eventually a $400 phone for $99 allowed cellular to take off,
>rather than be a business-only or the rich person's purchase.
Hardly. My first cellular phone was an AT&T speakerphone on PacTel
Cellular in LA. It was about 25# and screwed in my car. It was
expensive too. $45 a month plus 45 cents/minute for all calls.

I paid $700 for it. I had one of the first portable phones too. A
Samsonite briefcase with a phone and lead acid battery. Weighed about
45#. Man, you would be sitting in a restaurant and the phone would
ring, you would open your briefcase and take out the handset, with
it's cord. Was that FUN. People thought I was a really big wheel.

>When Sprint launched their PCS service they did it without contracts, and
>were selling $200 phones while the analog guys were giving free phones
>with contract. It didn't take Sprint long to adjust their business model
>to "free phone with contract" like everyone else, because enough people
>didn't see the value of paying $200 for an item that was "supposed" to be
>"free".
And Sprint never ever advertised that. They should have promoted the
no contract idea. "you'll love us or you'll dump us, so we will make
you happy"

I was one of their first customers, the service and coverage sucked.
Maybe they knew they needed to lock users in to keep them around.

>> The phones
>> aren't *free*, they are part of the marketing.
>>
>> >Think about it- your cable company doesn't give you a new TV every two
>> >years, or the gas Company doesn't buy you a new stove.
>> If you could only buy a tv from your cable company and nowhere else
>> this would be a valid argument. Glad that's not true.
>
>Again, with GSM providers no one forces you to get your phone from the
>company. Online vendors and even mainstream retailers like CompUSA sell
>unlocked unsubsidized phones. Most people, however, aren't willing to
>pay $200-400 for a phone when their service provider offers 10 different
>models for "free".

Times have changed, manufacturing volumes are very high now. Costs
should be declining on equipment but the market is being distorted by
the carrier's involvement.