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What's Keeping US Phones In the Stone Age?
knapper_tech writes "After seeing the iPhone introduction, I was totally confused by how much excitement it generated in the US. It offered no features I could see beyond my Casio W41CA's capabilities. I had a lot of apprehension towards the idea of a virtual keypad and the bare screen looked like a scratch magnet. Looks aren't enough. Finally, the price is ridiculous. The device is an order of magnitude more expensive than my now year-old Keitai even with a two-year contract. After returning to the US from Japan, I've come to realize the horrible truth behind iPhone's buzz. Over the year I was gone, US phones haven't really done anything. Providers push a minuscule lineup of uninspiring designs and then charge unbelievable prices for even basic things like text messages. I was greeted at every kiosk by more tired clamshells built to last until obsolescence, and money can't buy a replacement for my W41CA." Read on as this reader proposes and dismissed a number of possible explanations for the difference in cell-phone markets between the US and Japan. He concludes with, "It seems to me more like competition is non-existent and US providers are ramming yesteryear's designs down our throats while charging us an arm and a leg! Someone please give me some insight."
I finally broke down and got a $20 Virgin phone to at least get me connected until I get over my initial shock. In short, American phones suck, and iPhone is hopefully a wakeup call to US providers and customers. Why is the American phone situation so depressing?
Before I left for Japan about a year ago, I was using a Nokia 3160. It cost me $40 US and I had to sign a one year contract that Cingular later decided was a two-year contract. I was paying about $40 a month for service and had extra fees for SMS messages.
After I got to Kyoto, I quickly ended up at an AU shop and landed a Casio W41CA. It does email, music, pc web browsing, gps, fm radio, tv, phone-wallet, pictures (2megapixel), videos, calculator etc. I walked out of the store for less than ¥5000 (about $41) including activation fees, and I was only paying slightly over ¥4000 (about $33) per month. That included ¥3000 for a voice plan I rarely used and ¥1000 for effectively unlimited data (emails and internet).
Perhaps someone with more knowledge of the costs facing American mobile providers can explain the huge technology and cost gap between the US and Japan. Why are we paying so much for such basic features?
At first, I thought maybe it was something to do with network infrastructure. The US is a huge land area and Japan is very tiny. However, Japan would have lots of towers because of the terrain. Imagine something like Colorado covered in metropolitan area. Also, even though places like rural New Mexico exist, nobody has an obligation to cover them, and from the look of coverage maps, no providers do. Operating a US network that reaches 40% of the nation's population requires nowhere near reaching 40% of the land area. The coverage explanation alone isn't enough.
Another possibility was the notion that because Americans keep their phones until they break, phone companies don't focus much on selling cutting edge phones and won't dare ship a spin-chassis to Oklahoma. However, with the contract life longer, the cost of the phone could be spread out over a longer period. If Americans like phones that are built to last and then let them last, the phones should be really cheap. From my perspective, they are ridiculously priced, so this argument also fails.
The next explanation I turned to is that people in the US tend to want winners. We like one ring to rule them all and one phone to establish all of what is good in phone fashion for the next three years. However, Motorola's sales are sagging as the population got tired of dime-a-dozen RAZR's and subsequent knockoffs. Apparently, we have more fashion sense or at least desire for individuality than to keep buying hundreds of millions of the same design. Arguing that the US market tends to gravitate to one phone and then champion it is not making Motorola money.
At last I started to wonder if it was because Americans buy less phones as a whole, making the cost of marketing as many different models as the Japanese prohibitive. However, with something like three times the population, the US should be more than enough market for all the glittery treasures of Akiba. What is the problem?
I'm out of leads at this point. It's not like the FCC is charging Cingular and Verizon billions of dollars per year and the costs are getting passed on to the consumer. Japanese don't have genetically superior cellphone taste. I remember that there was talk of how fierce mobile competition was and how it was hurting mobile providers' earnings. However, if Japanese companies can make money at those prices while selling those phones, what's the problem in the US? It seems to me more like competition is non-existent and US providers are ramming yesteryear's designs down our throats while charging us an arm and a leg! Someone please give me some insight.
I finally broke down and got a $20 Virgin phone to at least get me connected until I get over my initial shock. In short, American phones suck, and iPhone is hopefully a wakeup call to US providers and customers. Why is the American phone situation so depressing?
Before I left for Japan about a year ago, I was using a Nokia 3160. It cost me $40 US and I had to sign a one year contract that Cingular later decided was a two-year contract. I was paying about $40 a month for service and had extra fees for SMS messages.
After I got to Kyoto, I quickly ended up at an AU shop and landed a Casio W41CA. It does email, music, pc web browsing, gps, fm radio, tv, phone-wallet, pictures (2megapixel), videos, calculator etc. I walked out of the store for less than ¥5000 (about $41) including activation fees, and I was only paying slightly over ¥4000 (about $33) per month. That included ¥3000 for a voice plan I rarely used and ¥1000 for effectively unlimited data (emails and internet).
Perhaps someone with more knowledge of the costs facing American mobile providers can explain the huge technology and cost gap between the US and Japan. Why are we paying so much for such basic features?
At first, I thought maybe it was something to do with network infrastructure. The US is a huge land area and Japan is very tiny. However, Japan would have lots of towers because of the terrain. Imagine something like Colorado covered in metropolitan area. Also, even though places like rural New Mexico exist, nobody has an obligation to cover them, and from the look of coverage maps, no providers do. Operating a US network that reaches 40% of the nation's population requires nowhere near reaching 40% of the land area. The coverage explanation alone isn't enough.
Another possibility was the notion that because Americans keep their phones until they break, phone companies don't focus much on selling cutting edge phones and won't dare ship a spin-chassis to Oklahoma. However, with the contract life longer, the cost of the phone could be spread out over a longer period. If Americans like phones that are built to last and then let them last, the phones should be really cheap. From my perspective, they are ridiculously priced, so this argument also fails.
The next explanation I turned to is that people in the US tend to want winners. We like one ring to rule them all and one phone to establish all of what is good in phone fashion for the next three years. However, Motorola's sales are sagging as the population got tired of dime-a-dozen RAZR's and subsequent knockoffs. Apparently, we have more fashion sense or at least desire for individuality than to keep buying hundreds of millions of the same design. Arguing that the US market tends to gravitate to one phone and then champion it is not making Motorola money.
At last I started to wonder if it was because Americans buy less phones as a whole, making the cost of marketing as many different models as the Japanese prohibitive. However, with something like three times the population, the US should be more than enough market for all the glittery treasures of Akiba. What is the problem?
I'm out of leads at this point. It's not like the FCC is charging Cingular and Verizon billions of dollars per year and the costs are getting passed on to the consumer. Japanese don't have genetically superior cellphone taste. I remember that there was talk of how fierce mobile competition was and how it was hurting mobile providers' earnings. However, if Japanese companies can make money at those prices while selling those phones, what's the problem in the US? It seems to me more like competition is non-existent and US providers are ramming yesteryear's designs down our throats while charging us an arm and a leg! Someone please give me some insight.
American's are more willing to pay for their techy gadgets. If the overpriced stuff here was perceived as that overpriced, no one would buy it, and the cell companies would be forced to sell their gadgets cheaper or with more features. I don't see this changing in the near future because we are accustomed to the pricing companies like Cingular and Sprint give us.
SmartBox
One word: copper
As long as some telco clings to legacy phone lines (paid for long ago), the stone age is all the US is going to get...
I agree, comparing the Casio W41CA and the iPhone is like apples and oranges. The 70MB Casio to an 4/8GB iPhone? I'd like to see how long it would take him to watch a YouTube video on his Casio.... The cell phone market in the US can't really be compared to the outside world because of the ubiquity of land lines in the US. The US land-line telephone infrastructure is probably the best when compared to the rest of the world, especially in Europe, where you have to get put on a waiting list to get a land-line....hence the popularity of cell phones.
If you post as Anonymous Coward, don't expect a reply.
One interesting comparison someone pointed out to me is this: people think of Microsoft as a monopoly. But can you imagine them charging you for a "loading Windows sound" the way telecoms charge you for ringtones?
... when compared to a cell phone.
For the closedness and proprietarity of MS, they actually give you quite a bit of freedom with your machine
Apology to Ubuntu forum.
I don't know how true this is, but I've always assumed that the United States has a harder time upgrading to new technologies than places like Japan because of size and population density. In some place like Japan or Europe a cell phone tower will cover quite a few people, in Montana however.. not so much. This doesn't have anything to do with new cell phone designs, but more with prices for text messaging and such. Does anyone know how united states technology compares to places like Russia/Canada/China/Brazil/Australia?
I agree.
;)
Let me also say, I work as a programmer in Japan, and I work on mobile phones here. It sucks big time. Japan is not a model we want to adopt. But for better or worse, the main reason things are different in Japan is that cell phones are many (probably most) peoples primary portal to the internet. Hard as it is to believe coming from the states, but many people like (I guess) to browse the web, shop, and post to forums, using phones.
In the US, we have laptops
Because consumers in America want free or cheap phones with long contracts.
Are you sure it's what consumers want, not what companies offer? It's just a honest question.
I'm from Europe, which is the middle ground between Japan and the US in cell phone technology. However, we get both: you can easily buy a non-SIM-locked phone and use it on any network you want, or you can get a subsidised phone from a smaller selection that a cell phone provider bundles with a cell phone plan. That said, they never seem to be functionally locked. That means, even if it's subsidised, Bluetooth won't be locked from file transfers and so. A thing I heard that is fairly common in the US.
I've been with the same cell phone provider for nearly 10 years, yet I never took a subsidised phone. It might be dumb, but I preferred to choose the phone I wanted.
Again, I don't say this for upsetting anyone. I just wonder if the lack of choice is imposed by the consumers themselves or if it's the telco companies that decided that this way is more lucrative.
Maybe, just maybe, most American cell phone owners do not want the newer phones that have 100 more do-dads built-in than last years model. How many features can you build into a tiny space before you go beyond what the consumer actually wants?
Bearded Dragon
It's a good question.
I've always had high tech devices -- PDAs that were tethered to phones, micro laptops, etc. None of them worked well enough. I still had to spend time hitting a workstation, especially to download large files.
That all changed with the HTC -- EDGE is really fast, it is always connected, I can view HTML e-mails (get a lot of them) and I can proof PDFs (I own a not-for-profit print shop, too). I easily save 10 hours a week not having to hit a broadband connected workstation to do my work. Just 10 minutes here and 10 minutes there a day and it adds up quickly.
On top of all that, I can read all my RSS feeds from my phone (not while driving). So all those 5 minute or 10 minute "do nothing" time periods are spent actually doing something I'd normally try to do setting aside an hour at the end of the day (or the beginning).
This is possibly the most insightful comment in this entire thread. Everyone is so busy considering why American telcos "suck" that they're not stopping to actually carry through on the comparison made. For those of you in the dark, this is a Casio W41CA:
/ 2006/01/20/Casio-Mobile-Rocks-For-Movies/p1
http://www.trustedreviews.com/mobile-devices/news
An impressive phone? Certainly. It's on the order of something like the Motorola Q phone, but with a better form factor. At the end of the day, though, the Casio is still just a phone. The iPhone, however, is a complete hand computer and digital assistant that hits a sweet spot in the market's needs. The iPhone may appear to have a similar feature list, until you actually get down to the nitty gritty of it:
iPhone - Casio
128MB - 70MB
4-8 GB Hard Drive - 2GB SD Slot
Visual Voicemail - ???
Auto-Landscape Mode - Manual Swivel
Phone Numbers from Webpages - No
Integration with Movie/Music Service - No
Easy "Pinch" and "Spin" Navigation - Phone Keypad
Auto-Threading of SMS Conversations - Standard SMS Mailbox
On-Screen Conferencing options - Play on-hold games with the phone
Safari Browser with "Zoom on Element" Features - Opera Mini with imprecise Zooming
Rich email client - ???
Smooth Integration with Google Maps, Youtube, and Mac Widgets - Some functionality through Opera. No Flash
Basically, it comes down to usability. The iPhone is a modest step from a pure technology and feature-set perspective, but it's a quantum leap from a usability perspective. While the iPhone's design does not meet everyone's needs, it meets the largest cross-section of users on the market. i.e. The people who are not technophiles and have little to no idea how to use all the bizarre and excessive features of a smart-phone. For the most part, people just want a phone. The iPhone gives them a phone + a comprehensive feature set that easily performs other daily tasks that people do (e.g. check whether, look up maps, etc.) and handily replaces several other devices that they might carry around.
Folks around here tend to laugh at Taco's initial assessment of the iPod. ("No wireless. Less space than a nomad. Lame.") Yet they turn around and make the exact same mistake with the iPhone. It's an interesting trend to behold.
Javascript + Nintendo DSi = DSiCade
Now, first I thought the poster was clueless, but then I saw some of the replies here, and jeez, guys, you're usually sharper than this.
:-)
I'm European, but I'm currently living in the US (San Francisco) and I've also lived in Japan for six months. Let me dispel some myths for you.
First, this is not a new phenomenon, these outdated cell-phones in the US. When I first came here in 2000, people looked at my phone (an Ericsson T28 World) like it was from outer space. Tiny, and with a standby time that lasted for two days. I stayed at a hostel the first few weeks, and the other room-mate there with a cell was amazed that I didn't need to recharge my phone every night... In general, the phones on sale in the US are two years behind Europe.
Second, the cell phone market in the US and Japan is very different from the one in Europe. In Japan and the US there are several different technologies used, in Europe it's all GSM, mandated by law. This means that in Europe you can almost always bring your phone from one provider to the next - all you need to do is change the little sim-card inside the phone. This is much harder, and in many cases impossible, in the US and Japan.
Third, in Japan, people have horrendously long commutes on public transport systems. This is why internet on tiny phone displays took off first there. Many people have 12-hour work days (or, at least, 12 hours away from home) - there isn't really time to sit down at a desktop computer and browse for fun in the evening. Americans, in contrast, commute by car. Maybe it's not such a hot idea to be reading your emails or checking out the latest slashdot story there...
Fourth, just a side comment - I've seen several people here comment that "Europe is more densely populated, that's why cell phone coverage is better". To this I say: BS. Sweden or Finland are two of the least densely populated countries in Europe, way less populated than California, and still the cell phones are a couple years ahead of whats available here.
Hope that helps.
"No US phone company will sell you a phone that hasn't been locked to them, and usually also crippled"
That's grim. here in the UK I paid £80 for a Motorola phone. I connect to orange on that phone, using a tariff that I got orange to match, which is from virgin. My monthly bill is around $3, for 2 phones, because I only pay per second of call time. (no monthly fee). There are no 'top up cards' or other bullshit. I get mailed a bill and pay by direct debit.
I flatly refused to buy into any new 'contract'. I just bought a new handset when my old one died.
DRM-free indie games for the PC and Mac: Positech Games
Try Canada... we probably won't even GET the iPhone up here, because what's the point when unlimited data doesn't even exist anymore. I think the top end data plan I saw was $200 a MONTH for 500 megs. Basic plans are about 4 meg's a month, and $12 per meg on top of that. I have a grandfathered, $50 a month for unlimited painfully slow GPRS, and even got someone asking to buy my account for quite a bit of $ because of it. Unless your rich or in an Enterprise organization there's no reason to have a smartphone up here with data capabilities. Oh and we get the same phones as the US, usually several months after the fact. As bad as the plans may be in the US compared to the rest of the world, it's still leaps and bounds beyond what we get.
'72 Pontiac TransAm 300hp @ 4000 rpm, 415 lb-ft @ 3200 rpm
'07 Nissan 350Z 306 hp @ 6800 rpm, 268 lb-ft @ 4800 rpm
Power isn't the problem. Sure, it's slid up the tach a bit, but modern cars have more than 3 gears, so they can stay in the power band longer. Yeah, peak torque has decreased a lot, but modern cars also weigh about 3000 lb less.
Besides, a modern car won't just smoke the '72 TransAm in a 1/4 mi, it can also do useful things like corner, it won't require you to tank up at the end of the drag strip, and it won't release enough pollution to supply London with acid rain for a week.
Are things different now than they were in '72? Sure, but they're also better. Granted, the state of automotive engineering was in a bad way from the late 70s to the mid 90s, back when the auto makers didn't know anything about fuel injectors and catalytic converters, but they've figured it out. Automotive technology is back, and in a big way.
Most of these reflect the real American driving culture (as opposed to that shown on TV), that is most of the time we don't drive for the sake of driving, hence the convenience of auto transmission rather than the trade off of efficiency, a trade off weighted due to cheap gas relative to Europe/Japan. Similarly we lack the need for high performance in most cars since we are a commuting culture and largely lack the mass transit that makes driving an indulgence or non-daily activity in urban areas of Europe.
To answer your question, US consumers are keeping phones in the "stone age." The *vast* majority of US cell phone users buy the phones and use them as - get this - phones .
I would like to second this. Honestly, I get really really tired of the constant bitching by people on Slashdot, of all places, on how they "want a cell phone that's just a cell phone and nothing else". Geez, this is supposed to be a place where people who understand technology come, but based on what I've seen here constantly over the years, there are a large number of cell phone luddites in the USA. I work in IT and among my co-workers in my department, we all, every single one of us (more than 12 in the department) have smart phones on which we use non-phone features. However, I can honestly say that among my friends and family, I have one friend who has a smart phone and none of my other friends and none of my family members are interested in anything but low function "cell phone that is just a phone" type cell phones.
But even as "just phones," they kind of suck. Where do I enter people's public key in the phone book? Where's the menu item that I'm supposed to select, to tell my phone to initiate a very-low-powered connection with another phone in the room, for purposes of exchanging a few megabytes of random OTP?
Why, when my phone is near someone else's, does my phone connect through the cell network instead of connecting directly?
Of course, I know the answers to all my "why" questions. Just pointing out how lame my phone is, even as a mere phone.
As copyright owner of this comment, I authorize everyone to defeat any technological measure which limits access to it.
I just changed services yesterday. I drove the salesperson nuts but I didn't get a single condition I wanted. Every single service was the same, there were no options. Everyone had two years contracts where as I wanted no more than a one year. I wanted an iPhone but I can't swing it. If I want out of the contract in a year it'll cost me $200. Well I thought that was for the extra cost of the cell phone. Nope the store will charge me $200 if I cancel in less than six months because they are paying for the phone. The $200 the phone company is charging is simply because they can. I paid an extra $100 to get a razor, it may be trendy but it seemed the best option. The salesperson also lied to me that I didn't have to send in for the $50 rebate, I wasn't happy about that. I was also annoyed that I didn't want text messaging or internet but I was warned that if I recieve a text message or accidentally hit the button for the internet I'd be charged. I asked can I disable it? No I couldn't. So if some one decides to text message me I get charged. They also lied about that. I was told it'd be $0.10 a message. When I got the contract it turned out to be $0.15 a message. Basically there were no options with the service and they were all the same. That's essentially price fixing when every company decides to set the same conditions and give no options. I even asked if there was an option of buying a phone outright, paying $300, and not have a contract? Nope, not a single service offered to sell you a phone and sell you a monthly service. It's a scam to lock you into 24 month contracts and they are all involved. There are a couple like Virgin offering monthly contracts or pay as you go but they are very expensive and the support on Virgin was miserable beyond belief, that was the service I cancelled. When my battery went dead I tried switching the service to a new phone. I only wound up killing both phones and tech support after over an hour was of no help. I wish I could recommend Virgin but their plans suck and if you need support they'll put you through hell. I happened to talk to one of their reps when I tried to buy the replacement phone and she admitted that support was by far their biggest complaint but their upper management had no plans to fix the mess. They are a last ditch service so they aren't responsive to their customers. Everyone is complaining about iPhones but when you compare them to what else is out there I can't see anything better. The phone itself is expensive but the service providers tend to be six of one and half a dozen of the other. Cell phones in general lack options. Your only choice buying a cell phone or not buying one, they spoonfeed you conditions. Congress really needs to take on the phone companies over the condition fixing but first they have to stop taking tens of millions from the telecoms.
I believe you mean "expandable storage". The miniSD slot is exactly what the Casio has, and is exactly what the market is rejecting! You technophile may appreciate the ability to swap 2GB SD cards, but to your average user it's a single 2GB expansion. (They're not going to spend $$$ getting multiple SD cards, assuming they spend the money to get the first one.) Which means that the 4-8 GB hard drive options are much more appealing.
This is 6 of 1, half-dozen of another. While a physical keyboard may seem superior, the market is saying that they're about the same. Walt Mossberg of the Wall Street Journal went on record saying that the two methods are more or less equivalent.
The WebKit browser that Nokia provides is severely lacking in usability. Opera Mini is better, but neither one compares to the Safari on the iPhone. Especially in the area of usability. The "Zoom on Element" feature alone greatly boosts the usability of the browser. This is still a definite win for the iPhone.
???
Email on the iPhone appears to work just fine?
This is a bit misleading. The Nokia phones have a Flash development platform for creating phone applications. That's not the same as being able to surf Flash movies on the web. Neither phone can do that. The iPhone handles YouTube by directly streaming H.264 versions of the movies. Its Quicktime decoders take care of the rest.
The iPhone has on-screen menus to conference in other callers. Just press a button. Most other phones require you to pull the PBX-style tricks of putting one caller on hold so you can dial up another caller, then transfer them together to create a conference. It's a pain, and completely non-intuitive.
The most striking problem with your analysis is that you're saying, "This geek feature doesn't work, that's why I don't like the iPhone." Which makes my point perfectly. You are not Apple's customer! You are a geek who knows how to make your smart-phone work for you. The majority of consumers are not. However, nearly all of them can make an iPhone work for them. Which is why the iPhone is trouncing the competition.
Lastly, the Nokia E61i is not a "European Phone". It's available here in the states.
Javascript + Nintendo DSi = DSiCade
Most of the phones sold in Europe are triple- or even quad-band phones, which work anywhere GSM is supported (even the US!)
Or go to India - with the state owned BSNL you pay -
$0.025 per minute for anywhere in India
$0.0005 per minute between BSNL subscribers
$.125 per minute for calls to US from India
US cell phone industry is still in dark ages.
i think you're missing two details:
1. half the argument in the original ask-slashdot post is that we pay too much for even the crappy service we do get, which can't be explained away with "maybe we don't want to do it the Japanese way" because i'm sure you do want cheap service to go with your non-fancy phone
2. the other half of the argument is that if you wanted a really nice phone you can't get one, because the entire range of devices goes from "no-frills" to "out-dated everywhere else in the world". the fact that you personally (and people like you) may not want a fancy phone doesn't mean that your preference should be the upper edge of the market, because the fact is that there are some people that want a fancy phone and the market underserves them
I know why I want OCR on the phone.
I want to snap a picture of a business card and have it OCR'd and added as a vcard in my phone's phonebook, and when it syncs with the computer, it will be in Address Book. I can discard the stacks of business cards and not carry a goofy card scanner to conventions.
I want to be able to photograph receipts and OCR them, have them compile into an expense report and email them, so that I don't have to fool with losing a receipt or leaving it off a report.
Sure, I have manual ways of addressing both problems currently, but devices are meant to make my life easier and geekier. A 2 megapixel camera is sufficient for OCR. These things should be possible.
Mod parent up.
Feature-wise (that's what the article was talking about), the Nokia N95 is widely considered the current technology leader in the current market place.
The iPhone is more about UI innovation than features - not to play down it's impact because of that, but still.
I think the N95 would stack up much more favourably against the Casio. It may not have the features out of the box, but S60 (the N95's OS) is designed so that you can add software to do many of the things listed (adding s/w to the iPhone is [currently] a hack and one still under development).
Max.
The distinction between "UI" and "features" only matters for marketing and bragging rights, not for real users. The iPhone deserves credit for lots of firsts that other companies laid claim to years ago on the basis of features that were so poorly implemented that most users ignored them.
This supply and demand argument cannot be more false. The fact is that monopoly economics are the only thing that can explain the US cell phone market. Considering the high prices, lack of choices, lack of feature competition, lack of service competition, and lack of coverage, anyone who argues supply and demand in the US cellphone market ought to have their head examined.
Let me list several types of vendor lockin in the US:
Handsets are locked to specific service providers. When one changes service, one cannot transfer an old phone to a new service provider, even when the provider offers compatible network. Even the iPhone which works on GSM networks is not a true GSM phone. It does not have a SIM card and cannot be used with any other service provider.
By not having a standard network like the rest of the world, the service providers all have different incompatible hardware. This means two things: a) a duplication of effort, like many cell towers using different technology covering the same area, and b) degraded coverage. b) becomes an issue when you think of ubiquity. Subways, for instance, are underground and cannot have ten cell network's infrastructure built into them. If all the cell networks ran GSM or some other standard architecture, one set of transmitters would work for all service providers. This standardization would also eliminate spotty coverage that is so frequently experienced in US cities. Handsets also, even when unlocked, do not work on different network architectures, so they are essentially locked anyway.
Because phones are bought by the service providers and not the customers themselves, the choice of which phones are likely to be most popular is made by market research, not the actual public. This limitation is HUGE. In other parts of the world, there are magazines that review literally tens or hundreds of phones every month! (with feature comparison charts at the back). I can go to any of thousands of stores and buy a phone without having to buy service, and, better yet, I know for a fact that my phone will work. This is not possible in the US. Conclusion: since service providers are choosing phone features, the public is not, and supply and demand is absent.
Another obvious pointer to the monopolistic nature of the US cellphone market is that teenagers are not driving the market. Some time way back in the 80s, some genius at some service provider got the notion that business customers were the people to market cell phones to. Let's face it. Business customers suck compared to teenagers. They are stingy, they keep their phones forever, they do not spend much time talking, and they worry about high phone bills. This is why all the payment plans in the US have prepaid blocks. In Japan, by comparison, the market is driven by teenages who have to have new phones every six months and rack up tons of money in bills to talk to their latest acquaintances. Anybody who has fought with a sibling over the phone in the house would appreciate the social pressure to talk on phones a lot here. However, the vendors just do not get it, and US customers are paying for the vendors' decision.
In the rest of the world, cellphone handset prices have dropped rapidly. I have watched a cellphone go from US$700 to less than US$300 in less than 6 months -- by which time it is often replaced by a newer version at near half the price of the older model. This is in the absence of the service provider subsidy. This subsidy is available any time I purchase service for any new device I wish to purchase whether or not the service provider is selling it. In the US, I could not look to other vendors for a particular phone because the vendor is the service provider, and no other phones will work with the provider's network.
. . . There are probably quite a few more I have not thought of at the moment, but that fairly well demonstrates the situation US customers are in.
Do you still believe that the market in the US is driven by supply and demand?
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