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Does the UK iPhone Plan Add Up?
An anonymous reader writes "Is it just me or is the UK iPhone deal seriously more expensive than the US deal? If you look at what AT&T offers compared to what O2 offers, you get significantly less for your money in the UK than you do in the States. It's also significantly more expensive than other non-iPhone deals in the UK, which offer similar services. Steve Jobs response to the more expensive UK iPhone is that 'it's more expensive to do business in the UK', but what does that mean? As a UK resident I'm disappointed that we didn't get the same plan as the AT&T plan, particularly the free mobile-to-mobile calls. Is there some element of the UK iPhone service that I'm missing here?"
In the US, we pay for incoming calls.
In other words, our minutes are eaten in half if we make as many calls as we receive. That's probably one aspect right there.
GPL Deconstructed
I'm un the US and with my provider/plan I don't get free mobile-to-mobile calls. Moreover, I have to pay for incoming calls and messages. This all depends on the particular provider/plan. It's about O2, not about Apple.
Alas, the tax rates are dramatically higher there and they probably sock it to the cell phone folks. There are many things to love about Britain, but it's not known for selling stuff on the cheap. Practically everything costs more there except, perhaps, for warm beer. And if memory serves me right, there was a raft of regulations that kept prices of beer cheap. That's a simple way to buy off the masses.
"As a UK resident I'm disappointed that we didn't get the same plan as the AT&T plan, particularly the free mobile-to-mobile calls." This has nothing to do with the iPhone and everything to do with your carrier. Virtually all U.S. carriers include unlimited mobile to mobile, iPhone or not.
The free WiFi via TheCloud makes the wifi portion of the iPhone actually useful, as there are thousands of TheCloud WiFi networks around the country. I don't think that there is anything similar for the US iPhone.
Also the unlimited data usage is probably underestimated. Sure, they say 1400 pages a day, but how big is a web page these days (excluding Flash)? 100KB? That's 140MB a day, which would cost a tonne over here with many other deals.
The talk and text limits are rather poor of course. I pay £10 a month for 500 minutes and 100 texts with Three, so when £35 only has 200 minutes and 200 texts and no phone subsidy you have to worry.
It's about Apple because they force you to use O2...
Then you can expect similar iTunes store or iPhone pricing as in US. Long-established british companies have probably learned on how not too pay the tax as many times on the same item as a foreigner new to the area would.
Apple pushing a product that's more expensive than competitors and expecting people to flock over and buy it just because of they style and hype surrounding it? Why that would NEVER work!
In the land of the blind, the one-eyed man is kinky.
I was given this rule prior to my first overseas trip, and I've found it to be generally accurate for the UK:
Take an item in the US, and it will probably cost the same in GBP in the UK as it does in USD in the US. With the current exchange rate, this means that most items cost a little over twice as much in the UK vis-a-vis the US.
Everything is more expensive in the UK than in the States, even though wages are lower on average. Why do companies charge more for the same product over here?
Because they can.
British consumers have become numbed to paying more for less over the years, so companies clap their hands with glee at the thought of increasing their profit margins by 50% or more over the US for exactly the same product. "Oh, but you use PAL." "Oh, but you use 240 volts AC with three-prong plugs." "Oh, but you have VAT." Always the same excuses, and they're pretty much bullshit - but nobody questions them any more. We've been ground down by decades of being ripped off.
You must think in Russian.
If I had to guess, I would bet it has something to do with the fact that the UK has these things called "laws" that protect consumer rights. In the long run, that costs corporations money that would otherwise be acquired through shafting the consumer.
I'm American but have lived in London for ten years. Yes, (some) things are more expensive here. I was curious and looked into it. Excepted from the above link:
When you buy goods from a trader, such as a shop, market stall, garage, etc, you enter into a contract, which is controlled by many laws including, the Sale of Goods Act 1979 (as amended by the Sale & Supply of Goods Act 1994 and the Sale and Supply of Goods to Consumers Regulations 2002). The law gives you certain implied, or automatic, statutory rights, under this contract.
The Sale of Goods Act 1979 (as amended) says that goods should be :
Store policies don't matter; this is the law and retailers must incorporate this cost into selling prices.
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It's not called Rip Off Britain for nothing you know.
Seriously though, yes our prices include VAT at 17.5% which people often forget to take into account but, even so, there are plenty of products which have such a colossal additional mark-up on them (Windows Vista is twice as expensive which tax and shipping costs cannot explain away) compared to our European and American counterparts that it is hard not to feel cheated.
The Wikipedia article on it is worth reading and notes that these items cost significantly more in the UK:
Unfortunately as we put up with paying those prices, we allow companies to continually screw us.
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I have no idea if the parent is correct or not but I'm British, God damn it, and I demand the right to go red in the face and get outraged about being ripped off.
Looking at O2's website, we see this breakdown in plans: 200min plus 400 text: 25pounds 750min plus 100 text: 35pounds 1350min plus 100 text: 50pounds http://shop.o2.co.uk/tariffs/18_months/Talker http://shop.o2.co.uk/tariffs THESE ARE ONLINE-ONLY SPECIALS. One has to assume that the iPhone will cost 10pounds more per month than the normal plans (since they cost an extra $20 more per month over here). So, the iPhone charges 10pounds more at the 200min level (but you loose half the texts), 10 pounds more at the 750 minute level (loosing 150 minutes, but gaining 400 texts), and 5pounds more at the 1350 minute level (again loosing 150 minutes and gaining 400 texts). They MIGHT be a worse deal than the AT&T plans over here, but not by much. They're pretty much standard O2 rates plus 10 pounds. Since the AT&T plans are the standard AT&T plans plus $20, that's pretty equivalent. NOTE: In both cases, the premium you're paying for an iPhone plan is getting you unlimited data and so if you're already paying for that, you might not consider it an increase in fee at all.
There is nothing special about a Mac or iPhone or iPod. The Mac provides me a great deal of value, so I buy it. The iPhone does not provide the value that the additional costs would warrant, so I won't buy one. I think people miss this simple point when they complain about the price drop of the iPhone. Current users effectively spent $2000 for the phone. This amount of money meant that the phone must have had some significant value to them, especially those that bought the first week. The $200 discount then represents a mere 10% discount, and 10% is an exceptional price to become an early adopter. I was not an early adopter my normal tolarance for contracted costs is about a third of what Apple and ATT wanted.
I hope we don't have to endure another year of moaning about the cost of the phone, or the cost of the plan, or the cost of early adoption. Those who have it find some value in it, and that is really all there is to it. Apple sells expensive machines, and those that need or want them buy them. Those that do not don't. If one needs or wants an iPhone, the costs will be worth it. Otherwise buy something else and apple will out the costs until it is low enough to attract the expected number of consumers.
"She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
I'm sure the European commission will LOVE apple locking the iPhone to O2, and I'm sure they will LOVE how it will operate together with iTunes. I'm also sure the European market will LOVE that it has shoddy 3G support. Also, I'm sure the lack of big Telecom monopolies in most EU countries will make it just as successful to do this over here as in the US. Don't get me wrong. Apple will make money here. It just won't be because the iPhone or the price plan, or service, or provider will be any good, but rather because the marketing and the hype will be. In short, they are going to offer a very sucky deal combined with a massive marketing campaign, and a lot of idiots will think the iPhone is actually remarkably innovative, when it really isn't even equal to a lot of phones already on the European market.
Then, if it actually does become a large success the EC will want to have something to say about the relationship between the iPhone, iTunes and the iPod, and also the deal with O2. If they actually decide to do something about it then a bunch of people who can barely find Europe on the map, let alone know anything about its legal history, will moan and accuse the EU of being partial against US companies, and as a result get flamed on slashdot [for great justice]. Politics at its finest...
You're the douche who bought an iPhone.
There is, of course, the translations part.. translating Windows can't be cheap; though it surely can't be -that- expensive either.
Note that Adobe and Autodesk also have vast price increases up to well over 2x as expensive; not including the 17.5% / 19% VAT that gets added on top. With the sucking U.S. dollar, that's only getting worse and worse. It'll be interesting to see if Adobe / Autodesk / etc. will adjust their non-U.S. pricing to adjust for this, as currently it is much cheaper to import from the U.S. -and- risk any import duty fees.
A consumer's statutory rights may not be excluded or modified in the UK. A retailer can only grant additional protection to the consumer, NEVER remove a statutory right
US retailers can put up a sign saying: "no returns on sale items." In the UK this is utterly unenforceable. US retailers, as a matter of course, print post-partum conditions of sale on the receipt that they hand you after you have paid for th goods. Again, such clauses are unenforceable, in the UK.
If a retailer offers a 12 month warranty on a product, all that does is simplify your life for 12 months. If you buy, say, a refrigerator and it breaks down 12 months and a day later, British Trading Standards Officers will likely argue that it is reasonable for a fridge to last several years. The 12 month warranty can never mean, under British law, "we wash our hands of the product after 12 months."
I'd like to see how Steve Jobs spins that, and now with our (Canadian) dollar at par with the US it will be even harder to justify.
Valdrax wrote: I kind of like the UK's rules better for buying goods at a store, but I'd hate to be seller on eBay or their equivalent of craigslist.
Those requirements only apply to sales by traders. Items sold by private individuals only have to be 'as described'.
A particularly active eBay seller might be considered a trader, but people trying to get rid of their old stuff don't need to worry.
"It's not just the American media that is desperate to publish misleading or downright false information in attempts to prevent the erosion of existing barriers to innovation"
But the iPhone doesn't innovate. It's actually an extremely limited handset that uses outdated connection formats at a time when people want 3G, picture messaging, video messaging and downloadable content. The nokia N95 does much more than the iphone and is several hundreds of pounds cheaper.
"Apple takes 40% of O2's revenues!!!"
The iPhone contracts give you a lot less for the same money than the rest of O2's contracts. The iPhone costs £269 in a market where phones worth £500 are completely subsidised by £35 a month contracts. This money is going somewhere and given the fact O2 would want to price the iphone favourably against rivals like the Prada and N95, it's almost certain it isn't going to O2.
from those articles:
"Actually that's not a good example at all, because Apple doesn't have a market monopoly in mobiles. Apple has also never been convicted of monopolistic behaviors in the UK, the EU, or the US because it doesn't have a monopoly and doesn't act to stop competition the way Microsoft has."
It's currently being investigated by the EU for blatent price fixing, ripping off some member states like the UK.
"Users are not locked into iTunes Music Store purchases; recall that the wags like to point out that a tiny minority of the music on iPods is purchased from iTunes and the vast majority comes from ripped CDs. Purchased tracks from iTunes can also be effortlessly burned to CD for use other other players, following the most liberal and open fair use rights in the industry. Thompson simply lied."
Ripping from CDs is illegal under UK law (you're only allowed to have one workable copy of media), even if it isn't enforced much. The only legal way to play the majority of popular music on the ipod is by itunes. He then goes on to mention RockBox which is also illegal.