| reply to Skippy25
Re: The real question is... said by Skippy25:said by djhexer:Why do manufactures charge sooo musch for equipment?? Simple answer to this is.... because they are subsidized through the phone companies. You are essentially buying the phone on credit. It is a fact and has been proven multiple times, people will spend more money on like items if they can "finance" them. If you could not buy a phone from a service provider directly and the phone manufacturers had to compete for your business the phones would never cost anywhere near what they cost now. Exactly. The price for manufacturing the phone itself is severely inflated.
I remember when I bought the very first Sanyo SCP-5000 when it came out. It was a big deal because it was Sprint's highest resolution phone. I bought it direct with no contract as I was already in one - $500.
Here we are 8 years later and a phone with comparable features to that - say, any Samsung non-smartphone - is around $400-$500 retail. You're not going to convince me that the inner technology has not gone down in cost. It has. They're just not dropping the phone prices any, and pocketing the profit.
If you ask me the ETF should be the difference between the upfront cost paid by the customer and the true amount discounted, based on the VALUE of the phone at the time of termination, not the MSRP at purchase. In other words:
- I buy a Storm 2 at $600 today, on a two year contract, for $200 out of pocket. I pay that. So now the phone's remaining cost is $400.
- I make payments on the plan at around $50/month. We all know that plan rates are inflated, especially voice plans. So let's throw a random number...$10/month towards recouping the phone discount, or $120/year.
- I want to cancel service after 1 year.
The phone should depreciate for that year. I've already paid $320 towards its cost; that leaves $280. If the current value of the phone is $400, that means my ETF should be $120. No more than that. That's fair and I wouldn't have a problem with it as long as it's itemized and properly valuated, with clear disclosures. The problem is that there often is not clear disclosure about what's going on, the price is inflated, there's no depreciation, and the customer loses a lot of money. |
