What I find quite interesting is that everyone gets so upset about having to pay for tiered data, or having to pay a $30 "upgrade" fee - but no one is concerned about the HUGE amount we pay each month for "hardware subsidy" - whether or not there's anything being subsidized.
It's no secret that when you sign a new 2 year agreement you can get a phone for a "subsidized" price which is several hundred dollars less than if you were to buy that same phone outright. We all then pay an extra amount each month (at least $10 - $15 per month, maybe more?) to offset that initial discount. We all know they're not actually GIVING us a $300 discount on that phone - Verizon is just loaning us the money up front, then we pay it back each month.
But after our 20 month "subsidy" period is over (and especially after our 24 month contract is up) does our monthly service go down by $15/month? Why not? Or if I buy a phone somewhere else at retail and activate it with Verizon, why do I still have to pay a monthly hardware "subsidy"? Isn't Verizon making tons of extra money on all those people who are out of contract or who bought their phones outright?
Verizon gives you two choices:
1) lock yourself in to our services for another 2 years and we'll loan you money to buy a new phone. or,
2) decide you don't want to be locked in, don't buy a new phone, and let Verizon make a HUGE profit margin on your monthly service.
Verizon (and just about every other major carrier) win no matter which you choose.
I just don't understand why people don't get more upset about THAT.
Last edited by TatDroid; 05-23-2012 at 07:33 AM.
Very interesting point TatDroid. Its never been a factor for me before because I've always upgraded at the 20 month mark. Now, it may be a major factor if I want to try and maintain unlimited data.Originally Posted by TatDroid
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Because, to be honest, no, I don't know if they are just giving us the discount or not... and they prefer it that way. I attribute this to an even bigger issue I have which is from basic economic theory.... supply and demand. Demand is something we can all get a good idea for by looking at their public records, subscription rates and general user data... but supply on the other - I don't think anyone outside of decision makers and engineers with Verizon knows what their "supply" of network capacity stands. Basic S&D says that when supply drops and/or demand increases, the price of product will increase in a free market. If they have direct control over who much supply they have (or how much they lead us to believe they have) does that really make this a free market structure? So to come full circle, without knowing how taxed their network is and what is driving the cost of the service I am receiving, there is no way to determine how much of a profit they are turning on my month-to-month bill. If it costs them 95% of what I pay to provide me with service as it is, then I could see it completely justifiable that a "guaranteed customer" for two more years in a very fluid market as enough of a payout for subsiding my equipment. If on the other hand they are pulling a 50% profit margin from me, and half of bill is to pay of my device, then I agree with you - that isn't right and needs to change. The problem is we (at least I) just don't know.We all know they're not actually GIVING us a $300 discount on that phone
If you always seem to have drama in your life, you are probably the one causing the drama.
If customer service representatives or restaurant servers always seem to be rude to you, you are probably the one being rude.
If your computer always seems to be freezing up on you, you're probably doing something wrong.
In my experience, drama begets drama, rudeness begets rudeness, and ineptitude begets ineptitude.
The whole idea behind an HTC Rezound being $600 actual price is ridiculous. The entire "subsidized phone" spiel is pure marketing crap.
What did that one site say the cost of iPhone parts was? Like $140? And the retail price is $600?
What I just don't get is that in pretty much every pother arena ion Tech prices go down. Things get cheaper as technology advances.
Not so in the wireless world. You want us to be loyal customers... consume, human, consume.... but then try to limit what we can consume.
I just don't get it.
To Tatdroid's point, honestly I just don't quite get it.
Where is this extra price? Why is it that if I pay full price I still pay the same as you every month.
It's not like it's LISTED ON THE BILL. That's why people aren't upset about that.
You sign up for a plan it is: xx.00 for a minutes plan + xx.00 for data + xx.00 for any extras.
Doesn't matter if you purchase it outright or subsidized.
hmmm I thought that extra price he mentioned was about the price disparity between phone carriers... I might be wrong tho ...
No, it is not "listed on the bill." You do pay for it though. Carriers subsidize the purchase of your phone to get you on contract. The contract price includes them making up their subsidy plus a profit on the sale.Originally Posted by PereDroid
Smarphones are just plain expensive. If someone could undercut the retail price on top of the line smartphones then they would.
The problem with smartphone technology compared with some other products is that smartphones are really still in their infancy. The improvements we all love and want cost money to develop and implement. Until things level off, top of the line smartphones are going to be expensive. You can pay retail or you can feel better about the price and have a carrier subsidize it. You will pay for the advances either way.
I still think TatDroid makes an excellent point about the contract price. If you're not subsidizing the cost of my phone then why should I pay the same price as someone who's phone was subsidized?
Basically, phones need to be unlinked from the carriers. It would allow a truer plan comparison. I'm not holding my breath on that though...
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