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The flip side of this argument - Be worried »
« Spell out the subsidy  
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tmh

@comcast.net


from:
TKJunkMail See Profile

Already possible

They didn't mention that most of the time the provider subsidizes the cost of the phone. In return, they'd like you to stay on their service for a while.

If you want to pay $600-$900 for an unlocked GSM phone, you can do that now. You can take it to T-Mobile or AT&T anytime, no problem.


Karl Bode
News Guy
join:2000-03-02

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quote:
They didn't mention that most of the time the provider subsidizes the cost of the phone. In return, they'd like you to stay on their service for a while.
Actually, he specifically addresses this:
quote:
The carriers defend these restrictions partly by pointing out that they subsidize the cost of the phones in order to get you to use their networks. That’s also, they say, why they require contracts and charge early-termination fees. Without the subsidies, they say, that $99 phone might be $299, so it’s only fair to keep you from fleeing their networks, at least too quickly.

But this whole cellphone subsidy game is an archaic remnant of the days when mobile phones were costly novelties. Today, subsidies are a trap for consumers. If subsidies were removed, along with the restrictions that flow from them, the market would quickly produce cheap phones, just as it has produced cheap, unsubsidized versions of every other digital product, from $399 computers to $79 iPods.


Jason Levine
Premium
join:2001-07-13
USA

reply to tmh
Actually, the article does mention subsidies.

The carriers defend these restrictions partly by pointing out that they subsidize the cost of the phones in order to get you to use their networks. That’s also, they say, why they require contracts and charge early-termination fees. Without the subsidies, they say, that $99 phone might be $299, so it’s only fair to keep you from fleeing their networks, at least too quickly.

But this whole cellphone subsidy game is an archaic remnant of the days when mobile phones were costly novelties. Today, subsidies are a trap for consumers. If subsidies were removed, along with the restrictions that flow from them, the market would quickly produce cheap phones, just as it has produced cheap, unsubsidized versions of every other digital product, from $399 computers to $79 iPods.


Jason Levine
Premium
join:2001-07-13
USA
reply to Karl Bode
Got it in just a minute before me, Karl.


TKJunkMail
Enjoy the sun
Premium
join:2002-03-03
Avalon, NJ
·Sprint Mobile Broa..
·Comcast

 reply to tmh
And the last time I renewed a few months ago, I had a choice of over 50 phone models(1/2 of which were no charge for the contract renewal). So I don't see this big technological deficit he speaks of.
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Jason Levine
Premium
join:2001-07-13
USA

I actually just renewed this weekend and got a new phone (actually 4 new phones total on my account). I got the LG VX8350 from Verizon Wireless. While they were trying to sell me features, I mentioned getting a USB data cable from someone other than Verizon. The guy mentioned that doing that could void my warranty.

In addition, there are features on phones that Verizon locks down or tries to hide (like using your own MP3s as ringtones) because they want to sell you on their VCast service.

If an ISP told their users that they couldn't use their own music CDs to make MP3s and instead had to buy from the ISPs online shop for their music, those users would either protest loudly or flock to an alternative.


NOCMan
Verizon Fios User
Premium
join:2004-09-30
Flower Mound, TX

reply to TKJunkMail
Japanese phones have a plethora of features we do not have.

Look at Verizon Wireless and AT&T tout 2 megapix cameras like they're the latest in technology. Japanese phones are capable of much more than 2 megapixels, can pay bills and vending machines, shop, etc from their phones. Most other countries have open platforms on the phones where most java apps will run on them and the market benefits from it. There are dozens of companies that are out there building apps and there's an entire shareware community out there as well.

While in America were stuck between a good provider with a crappy standard and a bad provider with a globally accepted standard.

Overseas they have phones that can do many things the iPhone can do (Just not as sexily) yet here we all have to clamor that were trapped with a GSM only phone on a carrier who can give a rats arse about their customers or their network.


james

join:2001-02-26
antarctica

I hope cell phones give everyone who uses them brain cancer. I'm tired of hearing idiots yammering about nothing in otherwise quiet, peaceful places. It makes matters worse that their provider is crappy, so they YELL into their phones. To be fair, the technology isn't the problem, it's the inconsiderate idiots who somehow make up the majority of our society. I have no idea how we've clung onto what we've got for so long without killing eachother in an orgy of blood and steel. Buut *crosses fingers* here's hoping


PolarBear
The bear formerly known as aaron8301
Premium
join:2005-01-03
·CableOne

reply to Jason Levine
said by Jason Levine See Profile :

If an ISP told their users that they couldn't use their own music CDs to make MP3s and instead had to buy from the ISPs online shop for their music, those users would either protest loudly or flock to an alternative.
Excellent point. That is exactly why I only buy Nokia or Windows Mobile phones. That way I have complete control over the files I put on them (ringtones, pictures, etc.).


tmh

@comcast.net

reply to Karl Bode
That's only partially true. The local market is only a small portion of the global market for GSM phones. Most countries in Europe and many in Asia mandate equipment portability, yet prices are nowhere as cheap as the article suggests.

Instead, what has resulted is a truly extensive variety of equipment available, many with features considered advanced by the local (US) market. Since equipment is not subsidized, handset vendors have more incentive to bring out more feature rich phones with an eye toward making a profit, rather than selling a limited range to the provider.

For example, M1 Singapore offers the "entry-level" Ericsson T250i, with camera, mp3 player, FM receiver, WAP browser, and other features. Deal price is around US$180 (S$300). Not exactly cheap, and definitely not the sub-$100 product the article alludes to.

A high-end device like the Ericsson T650i with camera, video, mp3, 3G, html browser, bluetooth and several other things goes for about US$450 (S$888).

If you sign up with a contract, you can get them for $0 (free) and around US$160 respectively however. You can still take that device to another carrier at any time, but contract termination fees apply.
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