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The Days of Cheap, Subsidized Phones May Be Numbered

Posted by timothy on from the installment-plans-are-not-for-your-benefit dept.

In the U.S., subsidized phones are the norm: for post-paid, long-term contract use, getting a low up-front price on a phone is one of the few upsides. New submitter Apptopia writes "After T Mobile mostly did away with subsidized phone plans, the other major carriers (Verizon, AT&T, Sprint) are paying attention. Carriers lose money with phone subsidies for high-end smartphones (particularly Apple's iPhone). If they do away with the subsidy, you will have to pay full retail price for phones, but your monthly bill will be lower." If people had a better idea what they were paying for, though, manufacturers might fight harder on price. There are lots of well-reviewed, multi-band, unlocked phones on Amazon and DealExtreme from lesser-known companies, and Nokia's new Asha 501 (though limited in many ways, including availability, having just launched in India) shows that the "smartphone" label can apply even to a sub- $100 phone.

5 of 329 comments (clear)

  1. confused by Anonymous Coward · · Score: 5, Informative

    It's always been cheaper to buy a phone outright and not have a contract

    1. Re:confused by Anonymous Coward · · Score: 5, Insightful

      Now I'd don't have £450 to drop on a new phone. So I'd have to take out a loan.

      This right here is what's wrong with consumerist entitled way of thinking and why corps have no problem shearing people as they wish, including these OMGFREE! subsidized phones.

      See, my train of thought would be "Now I'd don't have £450 to drop on a new phone. So I'd have to look for cheaper options or make do for a month or two with my old trusty Nokia", not "I can't afford it, therefore I'll overpay 30% because BUT I NEED THIS NEW SHINY NOW!".

  2. an interesting perspective... by cas2000 · · Score: 5, Insightful

    ...but bizarrely distorted from reality.

    telcos and their allegedly-"subsidised" phones are the reason why phones are still so ridiculously expensive. they remove the normal effects of competition in the tech market-place, so we're still paying $600-$1000 for a current gen phone just as we were 10 or 15 years ago.

    every other tech device - including extremely similar devices, tablets - have come down in price at least four-fold if not ten-fold over the same time period.

    phones remain expensive to buy outright because the customers that the phone manufacturers are targetting are their largest customers, the telcos. if new phones were cheap to buy outright, people would be far less inclined to sign up for abusive two year contracts to get a hire-purchase phone (not "free" and not "subsidised" - the price is embedded in your contract)

  3. Reason For Subsidies by Dredd13 · · Score: 5, Insightful

    Part of the reason for subsidies is the disjointed, non-standardized nature of the US cellular network. Paying full price for a phone is much more tolerable to me if I can jump ship to any other carrier that I want, like I could in most countries.

    But, today, if I bought an unlocked GSM phone, to use on AT&T, and then a year from now wanted to switch carriers, my choices are hampered by that lack of standardization. That phone is -- essentially -- worth only half as much because it only works on half the carriers (the GSM carriers, as opposed to the CDMA carriers).

    IMHO, that problem needs to be resolved before this works as a next step.

  4. Cute Theory by whisper_jeff · · Score: 5, Insightful

    If they do away with the subsidy, you will have to pay full retail price for phones, but your monthly bill will be lower.

    It's cute that you think that monthly bills will be lower if people are required to pay full price for their phones...