redholm
join:2004-10-31
Sunnyvale, CA Reviews:
 ·AT&T U-Verse
 ·T-Mobile US
1 edit | reply to pandora
Re: AT&T dropping Straight Talk due to phone unlocking law? +1 The math should be simple but until now not enough people did the math.
I estimate that a simple phone is subsidized with $10 a month and a smart phone is subsidized with $30.
That makes the real cost for the Galaxy II for with 2 year contract 299 + 24 * 30 = $1019
Not counting upgrade fees and taxes.
/edit typo |
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 leiboldPremium,MVM
join:2002-07-09
Sunnyvale, CA
kudos:5
 ·SONIC.NET
| said by redholm:I estimate that a simple phone is subsidized with $10 a month and a smart phone is subsidized with $30. Your estimates are too high. Since the purpose of the ETF is to recover the phone subsidy then in most cases the subsidy will be equal or less then the ETF. I realize that there can be special situations where a company is willing to make a loss on the subsidy for strategic reasons but those will be rare cases:
Regular phone: ETF = $150-175 over 2 years is $6-7/month
Smart phone: ETF = $325-350 over 2 years is $13-15/month
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redholm
join:2004-10-31
Sunnyvale, CA Reviews:
·AT&T U-Verse
·T-Mobile US
1 edit | I like that you showed how you came up with your numbers. I did not use ETF but I show my math.
I think ETF is related to what the phone actualy cost AT&T but the phone subsidies will be higher for two reasons.
1) AT&T want to inflate the list price of the phone to increase the perceived value of subsidized phones.
2) You are borrowing money from AT&T and they want interest and money to cover the people who default on their contract.
To get the phone subsidy you need to find the lowest price AT&T is willing to sell you the service and look at what the least expensive plan cost. The difference is the phone subsidy.
On a family plan an extra phone cost $10. AT&T did not sell you anything, no extra minutes, nothing.
AT&T charge $10, cost of service $0, gives a phone subsidy of $10.
The lowest cost for data is $10 per GB. The lowest cost individual data plan is $20 for 300 MB. The cost for AT&T for 300 MB is at most $3, in reality it cost much less.
AT&T charges $20, cost of service 0-3 dollars, gives a phone subsidy 17-20 dollars.
/edit typo |
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 CabalPremium
join:2007-01-21
Austin, TX
 ·Suddenlink
| reply to leibold
said by leibold:Smart phone: ETF = $325-350 over 2 years is $13-15/month
Unfortunately, an iPhone new and off-contract is $650-850, so $30+ a month is more accurate on the high end:
»store.apple.com/us/browse/home/s···/iphone5
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If you can't open it, you don't own it. |
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| Unless you purchase off eBay which I have for all of ours and the average I have paid was $150 for iPhone 4's and I paid $200 for my iPhone 4S. Prior to that I purchased an iPhone 3 and a 3GS a few years back for much cheaper than new. Each one looked almost brand new. But then I get our Otterboxes there too, NIB and haven't paid more than $25 for those. Why buy a subsidized when for a little more I can get a gently used one and avoid the contract? You don't have to get a brand new phone. Almost new is just as good. |
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