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norwegian
Premium
join:2005-02-15
Outback

1 recommendation

reply to LazMan

Re: Jailbreaking cell phones to become ILLEGAL at midnight

said by LazMan:

Difference is - if the carrier is subsidizing the phone, they are counting on x amount of revenue over the term of the contract to recoup the cost of the subsidy... Like I said - an iPhone 5 costs about $700 to buy outright, and $50 on a 3 year contract... the carrier is $650 in the hole on day 1. The ETFs (at least in Canada) are typically limited to about $200... So in theory, I buy a phone on contract monday for $50 - cancel it on Tuesday, and pay a $200 ETF - I'm still $450 ahead of the game; and the carrier is out $450 (they pay Apple/Samsung/HTC, etc for the device either way... Cost of acquisition is the term, and it's one of the biggest expenses carriers face)

I understand most of what is said, but as a consumer buying an iPhone for $700, general rule of thumb, 50% mark up applies to cover the man in the middle's business and profit, so reduce that to $350 for the cost initially.
If you are a big Telco buying in bulk, $100 at least would be wiped off the initial cost at least due to bulk buying, if not half of the initial $350, which would make it $175 for the cost of the $700 iPhone.
This isn't including the cost of manufacture, where you may find a realistic figure of $100 per phone could be possible.

Just putting in perspective the dollar figure here. Off the shelf cost to the consumer is considerably different from the factual cost of the phone.
These are not factual figures, but the general public can be blinded to what real term figures of the phone they buy is.
That goes for most products give or take a few percentage points. The end user doesn't think too much about this when the "newest and greatest" is forced upon them before Xmas.

This would then theoretically put the termination charge equal to costs and a few dollars for profit. Most will not go the path of unlocking and will be sucked dry by the 2 yr/$50/mth fees for the phone.
That makes $1200 for a $200 phone over a 2 year period.
I'd love to see those profits for any company I worked for.
Down Under we are charged extra for phone contracts, from $20 to $80 for phone calls on top.
I'm not sure what you see there.

Quite differing figures to your initial theories quoted here for a handful who might consider being smart about the money they spend.
Nothing illegal in that from where I sit.

On those figures the law is for the corporations to protect very high profit margins, not take care of the end users, who spent the money and want a phone that works and a service.
Microsoft on the other hand charges extra for service outside of the US, does it not?
Beautiful example of fund raising.

There is a vastly differing cost to margin most people do not see, and an employee saying this would be sacked and or sued depending on the cost to the corporation from those words.
Laws are in place to cover the corporation here too, not the person who sees a company ripping blind the general public.
--
The only thing necessary for the triumph of evil is for good men to do nothing - Edmund Burke



LazMan
Premium
join:2003-03-26
canada

Difference is, my numbers didn't come out of my ass... As I said earlier; the cell carriers get no great breaks in cost as compared to retail anymore; the iPhone was a game changer in that regard. You can say there's a 50% or better markup, but doesn't make it true...

Anyways...



Lagz
Premium
join:2000-09-03
The Rock

said by LazMan:

Difference is, my numbers didn't come out of my ass... As I said earlier; the cell carriers get no great breaks in cost as compared to retail anymore; the iPhone was a game changer in that regard. You can say there's a 50% or better markup, but doesn't make it true...

Anyways...

Here's some numbers for you that won't just fly out of an ass.... I didn't specifically see you quote crap. Here in the US things are quite different than you describe.

I recently bought an HTC one X+ from AT&T. AT&T charges 199.99 with a contract and an ETC of $325. With fees and crap, that phone ended up costing $250 out of pocket directly from AT&T. Phone $250 + ETF $325 = $575. If we use what AT&T claims as the regular price, which is $549, then you can clearly see that if you buy the phone subsidized, then pay the ETF, you will end up paying more than the regular price AT&T claims the phone costs if you were to cancel.
--
When somebody tells you nothing is impossible, ask him to dribble a football.


LazMan
Premium
join:2003-03-26
canada

said by Lagz:

Here's some numbers for you that won't just fly out of an ass.... I didn't specifically see you quote crap. Here in the US things are quite different than you describe.

I recently bought an HTC one X+ from AT&T. AT&T charges 199.99 with a contract and an ETC of $325. With fees and crap, that phone ended up costing $250 out of pocket directly from AT&T. Phone $250 + ETF $325 = $575. If we use what AT&T claims as the regular price, which is $549, then you can clearly see that if you buy the phone subsidized, then pay the ETF, you will end up paying more than the regular price AT&T claims the phone costs if you were to cancel.

199.99+325 = 524.99 by my math... "Fees and crap" aren't part of the phone price; that's part of the activation of the service - and you'd end up paying those even if you bought the phone outright...

$525 $549 - it's not much of a discount, but it's still a bit of one...

We're getting bogged down in details here, though; and getting off on to a bit of a tangent - like I've said; I have no issue with the concept of the law (even though the punishments are inflated, and no doubt meant to scare people who run unlock businesses, rather then actual end users; and I have no idea where it honestly fits in to the DMCA) - but the idea behind it; that a phone is locked to the subsidizing carrier UNTIL the subsidy is paid out, I have no problem with...

But the flip side should be that when the subsidy is paid out, the phone is automatically unlocked at no charge to the end user...


Lagz
Premium
join:2000-09-03
The Rock

said by LazMan:

said by Lagz:

Here's some numbers for you that won't just fly out of an ass.... I didn't specifically see you quote crap. Here in the US things are quite different than you describe.

I recently bought an HTC one X+ from AT&T. AT&T charges 199.99 with a contract and an ETC of $325. With fees and crap, that phone ended up costing $250 out of pocket directly from AT&T. Phone $250 + ETF $325 = $575. If we use what AT&T claims as the regular price, which is $549, then you can clearly see that if you buy the phone subsidized, then pay the ETF, you will end up paying more than the regular price AT&T claims the phone costs if you were to cancel.

199.99+325 = 524.99 by my math... "Fees and crap" aren't part of the phone price; that's part of the activation of the service - and you'd end up paying those even if you bought the phone outright...

$525
One example is the AT&T upgrade fee, which is $36. Yes you can with some hassle get that removed, but the fee is still charged to your account. This fee is to help recover the cost of the phone. I know, I used to work for AT&T when it was Cingular back when they instituted this policy. That fee is rarely ever mention at the point of sale(at least not back then, nor this time when I was the buyer). This is one of many tactics that is used in order to recover the cost of the phone. You opened this can of worms and it is not at all off topic.
--
When somebody tells you nothing is impossible, ask him to dribble a football.


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said by Lagz:

One example is the AT&T upgrade fee, which is $36. Yes you can with some hassle get that removed, but the fee is still charged to your account. This fee is to help recover the cost of the phone. I know, I used to work for AT&T when it was Cingular back when they instituted this policy. That fee is rarely ever mention at the point of sale(at least not back then, nor this time when I was the buyer). This is one of many tactics that is used in order to recover the cost of the phone.

I've been with Verizon Wireless since their inception. I deal with them a lot online. They are all ways trying to get me to upgrade. I all most did it once about six months ago. I was going through the step by step process online---picking the phone, picking the plan, and so on. Screen after screen but...its not until the last screen the upgrade fee of $30 appears. Upgrade when I am doubling my bill with the new plan, plus forking over $250 plus bucks! Heck, it they are going to want that $30 dollars they should simply bury it somewhere the cost of the phone or some other way rather than saving it till the end and then insult me by not only charging it but hiding it until the very end of the order process.

I stopped the upgrade at that time just on principle and my indignation of the upgrade fee.
--
The signal is usually drowned out by the noise.