Should You Ever Buy A New Phone Again?

[DroidModderX]

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We learned a few days ago that Verizon is doing away with Subsidized pricing forever. They have also decided to change their pricing structure to make things "easier" on consumers. I think in a way this could be a good move for consumers overall. This is what they have in Europe and it has pushed carriers to be super competitive. In Europe most people bring their own devices to their carrier. So there is no reason to be locked down in a contract. With no contracts people go to the carrier that cost them less.

Here in the states we have become accustomed to entering a two year contract and getting a phone at a highly reduced rate. T-mobile did away with subsidized pricing a while back. You can purchase a phone from T-mobile, but you are not obligated to stay with them at all. I actually bought my Galaxy S6 from T-mo. I payed for it outright and then canceled my plan with no penalty. Now we see Verizon doing the same starting August 13th. The question remains should you ever buy a new phone again?

There is now no real incentive to buy a new $650 device. With no discounted pricing it may not even be feasible for most people to pay that kind of price for a phone. I have always paid full price for my phones, but only to save my unlimited data plan. There is now no reason for me to ever ditch my legacy plan since I won't be able to save any money on purchasing a new device. I have a feeling that if AT&T and Sprint follow suite we will see the price of flagship devices nose dive, or we won't see flagship calibur devices released in the future. We may see more devices like the OnePlus 2 and Moto X Pure in the near future. This may also pave the way for huge growth for companies like Xiaomi or Huawie. Hopefully these companies will see the opportunity they have here and start including CDMA LTE chips in their devices.

If you must have a new and high powered flagship there will be other options than buying new. After Verizon told me they would not be willing to sell me an LG G4 without changing my plan I went to Swappa and found a slightly used device with no signs of wear for $430. I inserted my sim and all is well my legacy plan remains in tact. Swappa has just about every phone under the sun for sale. This post is meant to stir up some discussion. What are your ideas on this new move by Verizon? Do you see yourself purchasing a brand new $650 device now that there will be no subsidies? Do you see yourself going with a lower end device, or maybe a Chinese branded device? Sound off below.

 

[xeene]

Ordered lg g4 yesterday on Verizon from best buy for 200$ to be delivered to my house on Tuesday. I plan on swapping sim cards prior to turning on device and keeping my unlimited data plan.

And they also sent me a free 24" lg led tv.

 

[DroidModderX]

I have always been too afraid to buy a device on contract and then just swap the sim. What do you do if your sim goes bad and you have to take the phone to verizon to get a new sim?

 

[Dusty]

I think this will change how we view devices for sure, and I think it will also restructure device pricing as well. We always knew that phone prices were ridiculously bloated. If VZW or AT&T was selling you a device for $199 you'd better believe that they didn't buy it for $199 and the OEM didn't sell it to them for $199.

I think were going to see fewer unique devices per OEM along with fewer OEM releases, over 18 months for sure. What we're going to get will be pointedly BETTER and more clearly "up-spec'd" devices at each release. It'll have to be that way. Now an OEM will be forced to throw in the kitchen sink at a great price point. I'm guessing the tiers will be sub $200, $200-$400, and $450+ for the real flagships that will compete on high grade materials, customization, and hardware features. I also see skins like touchwiz being irrelevant. I just don't see the average price of devices remaining at $650; that price point was the product of an artificial market.

$600+ devices will be the unicorns of the bunch that will be limited availability specialty devices.

It's about to be every-OEM-for-themself!

 

[TisMyDroid]

I do think we are going to start seeing new phones reduce in price. I believe retail prices for phones have been set by the carriers from the beginning and the manufacturers followed the carriers lead. Now that that influence should be gone, there will be more competition amongst the manufacturers rather than the main competition being among carriers. For me, if their plan includes $20 per line, then I stand to save $80 per month with the same benefits. With those savings I would have paid off a $700 new phone within 9 months.

sent from my Note3, (currently, but soon to be??) using tapatalk

 

[cr6]

I have always been too afraid to buy a device on contract and then just swap the sim. What do you do if your sim goes bad and you have to take the phone to verizon to get a new sim?

Verizon will always provide you with a replacement SIM free of charge, as long as you're a customer of theirs in good standing. It shouldn't matter if you're using a device you've paid off, currently have "on contact", or recently purchased. Obviously they will always try to look at your plan in order to "save you money", but as long as you make it clear you aren't interested in changing plans, you'll be ok.
Some employees can be a little more aggressive than others, but we've never had a problem at our local corporate vzw store.

S5 tap'n

 

[pc747]

We have so many options now whether it be nexus line, one plus line (though I personally an not feeling the plus two), moto, and the international phones that @Jeffery and @wicked posts on the forum. You also can buy the phone through a third party like best buy on a best buy card and pay payments to them.


If carriers are pushing the responsibility of selling the phone to third party companies so they can worry about dealing with insurance and warranties, corporate stores will shrink across the nation.

With the Nexus 6 and (now) moto X having all the radios and being able to be purchased through someone else it is matter of time before we see one release (vs carrier specific) of a device and the customer buy the phone through a third party and put a carrier sim card in.

 

[Ollie]

For about $15 dollars a month added to your bill you can upgrade three times a year on Tmobile.

You never truly own the phone at that point. I think more people will go this route since most people don't sell their old phones when upgrading.

 

[kodiak799]

If VZW or AT&T was selling you a device for $199 you'd better believe that they didn't buy it for $199 and the OEM didn't sell it to them for $199.
!

They bought those phones typically for @$450-$550....the $350 ETF is not a coincidence, that's approximately the amount they were subsidizing your new phone purchase, $250-$350 depending on the device.

Tear downs have consistently shown top-tier phones have a component cost of $200-$220, plus labor (which isn't much, maybe $20 per phone). But then you have to factor in overhead, including development and marketing costs.

Despite an actual average sale price (with subsidy) close to $450-$500, only Sammie and Apple have been able to make money. So I wouldn't expect prices to drop much below $500 (which is what the new Moto X is rumored to sell for).

However, the elimination of subsidies might lift the used phone market yielding more (maybe $50, just guessing) to you if you decide to sell your old device. Although phone with non-removable batteries might be worthless if you aren't able to replace a 2-year old battery before selling...but most buyers are unlikely to trust you did that and incapable of doing it themselves.

 

[kodiak799]

If carriers are pushing the responsibility of selling the phone to third party companies so they can worry about dealing with insurance and warranties, corporate stores will shrink across the nation.

A lot of questions and a lot to develop going this route....namely will the carriers push maintenance and service onto the OEM's? Theoretically, the carriers still have to push the updates to make sure everything works on their network.

And if the carriers still want exclusives and certain things for their network, they're going to have to provide some sort of guarantee (sales volume) to the manufacturers. So if the carrier is on the hook for obsolete inventory, they'll then have to promote those phones in some way over other phones to make sure they hit their sales numbers. Or maybe VZW will say "for us to activate/support the phone on our network, it has to have X, Y and Z"...meaning it then becomes a basic cost/benefit analysis whether the manufacturer will agree or just walk away.

 

[Dusty]

They bought those phones typically for @$450-$550....the $350 ETF is not a coincidence, that's approximately the amount they were subsidizing your new phone purchase, $250-$350 depending on the device.

Tear downs have consistently shown top-tier phones have a component cost of $200-$220, plus labor (which isn't much, maybe $20 per phone). But then you have to factor in overhead, including development and marketing costs.

ETFs are arbitrary and are at the whim of the carrier, class action suits have proven this. I guarantee you that whoever is subsidizing the phone paid less than what they provide the phone for under contract. You have to remember that they purchase at bulk pricing to stock their shelves. That pricing isn't going to resemble a per device build "guess" from a tear-down. Long before the device teardown, and long before you enter the store several things have happened. The OEMs have procured parts in bulk from suppliers, OEMs have worked out the pricing strategy, and carriers have worked out how much they'll pay for their massive quantity of devices. Per item pricing of anything is cheap when you buy them by the million.

 

[kodiak799]

I guarantee you that whoever is subsidizing the phone paid less than what they provide the phone for under contract.

No, they did not. You are 100% wrong on this one and I already explained it. And if you're selling the phone on contract for more than you paid, then by definition there is no subsidy.

Back when VZW got the IPhone, it was "reported" they would be paying Apple about $350 per phone subsidy (which was about $50 more than they were paying for Android phones).

 

[Dusty]

No, they did not. You are 100% wrong on this one and I already explained it. Back when VZW got the IPhone, it was ESTIMATED they would be paying Apple about $350 per phone subsidy (which was about $50 more than they were paying for Android phones).

Estimated.

I've been around long enough to know that when you walk out of the door with anything from a company big as VZW they've already made money on it. The only question that remains is "...did they make enough or as much as they wanted?".

 

[JDH]

So, after all this you can still walk into Verizon, get a new moto x 2014 on a 2 year individual contract for $60 per mo with unlimited t & t and 1gig of data as long as you do it before 8/13/15 ??

 

[94lt1]

So, after all this you can still walk into Verizon, get a new moto x 2014 on a 2 year individual contract for $60 per mo with unlimited t & t and 1gig of data as long as you do it before 8/13/15 ??

Looks like it....