At 12 Sep 2006 16:21:15 +0000
Steevo@my-deja.com wrote:
> 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.
CompUSA, Fry's, some independent phone dealers, several online web
Vendors (non-eBay) like TigerDirect, Geeks.com, etc.
> The unlocked ones are usually lots more than the carrier
> locked ones. That's the carriers keeping a stranglehold on the
> equipment again.
No, that's the carrier offering a discount in return for a comittment.
While I'm not a big fan of contracts, I recently signed a one-year w/T-Mo
to get my MDA for $250. I could've bought it w/out contract for $450, or
bought an unlocked version for about $500-600. Since I didn't intend to
leave T-Mo, I figured why not take the subsidy? I've been with T-Mo for
5 or 6 years and had no plans to leave. Worst case scenario I eat a $200
ETF, which makes the phone "regular price" again.
>
> 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.
In most cases you could use a Wal-Mart prepaid phone as a replacement for
far less than an unsubsidized phone from the carrier. For example, a low-
end T-Mobile Nokia 6010 is a $30 pre-paid phone or $100 from T-Mo w/o
contract. You could buy the $30 version, throw away the SIM and use it
as a replacement on your contract.
> 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.
Thanks for clearing that up. I have done a couuple of years ago when I
needed temporary service with fax capability for a business, but that was
in 2003 or 2004, IIRC.
>
> Hardly sounds like an open competitive market to me.
Sure it is- the free market is also (sadly) a two-way street. Companies
can market their service in anyway they see fit legally, and we're free
to buy or not to buy
Again, if you want no contract Cingular service, use a reseller like
Consumer Cellular (savecell.com).>
> >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.
What do you mean by "fake wholesale" price. I'm talking about the price
a carrier pays for their phones in high-volume orders. That's a "true" a
wholesale price as you can get.
>
> >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.
Correct- again, that's the "free market" at work. No service provider is
forced to let you use any equipment you'd like, and you're not forced to
use them.
You don't really want a free market (which is fine), you want a
government regulated market with consumer protections mandated. Again,
there's nothing wrong with wanting that- just don't pretend that's what a
free market is.
> 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.
So how is today's market worse? If you assume the EFT reflects a fair
discount off of a phone price (which it is on high-end phones- certainly
not on a low-end freebie) you can accept the EFT as an upfront rebate
that you repay if you cancel early.
I'd like the freedom to purchase any company's service without a
contract, but I'd like it as an option in addition to the current system,
not instead of it. The discount-for-contract game has it's advantages,
particularly as new services are rolled out. My MDA will be a dog when T-
Mo rolls out 3G next year, and I might be in the market for it's
replacement. Why wouldn't I want to spend $300 for it instead of $500 or
more if I intend to stay with T-Mobile?
> >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.
They offere contractless service for at least a year before changing the
business model (IIRC, the words "no contracts!" were prominently printed
directly on the box of that original handset they offered for $199.)
> >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.
No, it's being distorted by increased feature sets. RCN (a wireless
industry trade paper) recently ran an article about how companies like
Motorola and Nokia were racing to develop a $10-15 wholesale phone for
use in India, since the income level there prohibits selling even what
we'd call a low-end phone. These $10 phones were single-band GSM with
b&w low-res displays, and no data services (except SMS). Essentially the
equivalent of, say, a Nokia 5190 except a bit smaller. Most US consumers
wouldn't accept a phone like that without cameras, MP3 players,
bluetooth, MMS, etc.
So costs aren't really distorted by carrier involvement, they've
essentially "bottomed out" like, for example, the laptop market has- you
really can't build a laptop with color screen and a few hours of battery
life to sell for less than $300-400, so future models at that price get
more RAM, a bigger HD, etc. as time goes by. Similarly, the wholesale
cost of a color-screen phone won't drop much below $30 for awhile, but
they'll get more advanced features as time goes on, until even a "low-
end" phone will have bluetooth, a sh*tty camera, and stereo MP3 playback.
Then, perhaps, competition will drive down ETFs, like Verizon did
recently with their new (and fairer) "pro-rated" ETF, which other
companies will eventually adopt if they feel not having it i driving
customers away.
That's the great thing about a free market- it eventually corrects
itself, even if it takes a long time to do it!
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