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