It's time for a shift in contract terms......

Scholar

It's time for a shift in contract terms......

There was a time when a phone purchased under the two year contract was fine. Technology didn't grow as fast, nor did the demands of the customer, the network, etc.

But now the landscape of the wireless industry has completely changed, and continues to do so at an amazing pace. The rapid advancement of operating systems and related apps is also growing at the same pace. 

The older two year contracts are in fact obsolete when considering the extremely quick technology growth. Especially when combined with ATT's total lack of updates. Android 1.5 was released nearly two years ago, and most apps now wont work with it, not to mention the lack of flash and numerous other applications. It appears that android is progressing about three generations a year.

Where does that leave the customer? Those with iphones might be ok, at least the last generation was given the option to upgrade their os. WP7 will also get updates, but being a new os they're probably under more scruteny to 'get it right' than otherwise. The rest of us (android) are pretty much scr$w&# (I'll avoid the custom rom issue, since it technically voids the warranty and isn't an 'easy/simple' option for all).

A one year contract seems much more reasonable these days. I'd have no problem if my phone, which came with update promises (dell streak), saw them. As it is, I'm now stuck with an 18month old operating system that's at leat four generations behind, and can't do many of the things I'd like or need to do.

Message 1 of 34 (1,706 Views)
Scholar

Re: It's time for a shift in contract terms......

Flees their flock! I love!. The smartphone been a BIG $ maker. The shiftin contract should be to giveus phones at a non inflated price. No contract shouldn't be more than double contract price. $100. with,200 w/o.
They're not paying more than $100.-$200.per phone. MAX....
Message 16 of 34 (840 Views)
Professor

Re: It's time for a shift in contract terms......

If we did away with contracts and the phones became available for sale in the general retail market (once again, like wired service phones), competition would drive the price of phones down.  Remeber when landline phones started being sold in department stores?  Prior to that, at&t would charge hundreds of dollars for a phone.  After they were sold in department stores, prices got so cheap that now landline phones are almost disposable.  Granted, I don't see cell phones getting that cheap, but I would not be surprised if the price cut in half.  Also, if not locked into contracts and available to change carriers easily, I would expect to see the cost of service go down.

Message 17 of 34 (822 Views)
Expert

Re: It's time for a shift in contract terms......


Tilt-A-Rama wrote:
Flees their flock! I love!. The smartphone been a BIG $ maker. The shiftin contract should be to giveus phones at a non inflated price. No contract shouldn't be more than double contract price. $100. with,200 w/o.
They're not paying more than $100.-$200.per phone. MAX....

And your proof is where, or is this just unfounded speculation / opinion

Message 18 of 34 (809 Views)
Expert

Re: It's time for a shift in contract terms......


FredW wrote:

If we did away with contracts and the phones became available for sale in the general retail market (once again, like wired service phones), competition would drive the price of phones down.  Remeber when landline phones started being sold in department stores?  Prior to that, at&t would charge hundreds of dollars for a phone.  After they were sold in department stores, prices got so cheap that now landline phones are almost disposable.  Granted, I don't see cell phones getting that cheap, but I would not be surprised if the price cut in half.  Also, if not locked into contracts and available to change carriers easily, I would expect to see the cost of service go down.


You might see a 10 - 15 percent drop from the advertised retail price, considering that most, are specific to a type of carrier - GSM or CDMA and there will still be exlusive devices for a carrier. I doubt you will ever see a Atrix or a Iphone for a unsubsidized price that is near the subsidized price of the phone. back when the 3GS 8GB first released the price by VodaPhone in Italy was about 449 Euros or about 770 USD at that time,  O2's price was about 810 GBP or about 1,580.00 USD at the time.

 

Pricing for then was obtained here - which was published about the time the 3GS was announced on 06/09 

 

http://news.softpedia.com/news/iPhone-3G-Will-Actually-be-Expensive-in-Europe-87877.shtml

Message 19 of 34 (807 Views)
Professor

Re: It's time for a shift in contract terms......


wingrider01 wrote:

FredW wrote:

If we did away with contracts and the phones became available for sale in the general retail market (once again, like wired service phones), competition would drive the price of phones down.  Remeber when landline phones started being sold in department stores?  Prior to that, at&t would charge hundreds of dollars for a phone.  After they were sold in department stores, prices got so cheap that now landline phones are almost disposable.  Granted, I don't see cell phones getting that cheap, but I would not be surprised if the price cut in half.  Also, if not locked into contracts and available to change carriers easily, I would expect to see the cost of service go down.


You might see a 10 - 15 percent drop from the advertised retail price, considering that most, are specific to a type of carrier - GSM or CDMA and there will still be exlusive devices for a carrier. I doubt you will ever see a Atrix or a Iphone for a unsubsidized price that is near the subsidized price of the phone. back when the 3GS 8GB first released the price by VodaPhone in Italy was about 449 Euros or about 770 USD at that time,  O2's price was about 810 GBP or about 1,580.00 USD at the time.

 

Pricing for then was obtained here - which was published about the time the 3GS was announced on 06/09 

 

http://news.softpedia.com/news/iPhone-3G-Will-Actually-be-Expensive-in-Europe-87877.shtml


If subsidized pricing goes away, the branding of and exclusivity of devices would need to go too. I don't believe it would cost any more for manufactures to start making devices that would run on CDMA with a SIM slot for GSM and the various bands required for all the carriers. The ability to streamline manufacturing and eliminate the development of different ROMS for different carriers would offset the costs of the added technology. I'm not saying it would happen quickly, but eventually due to all devices being operational with all the carriers, the competition would drive prices downward. Then the ability of a customer to leave when he wants and still use his/her device at  full capacity with another carrier would drive the cost of service down. Unfortunately, this is good old America where corporate greed and lobbying rule. The carriers would fight this all the way.

Message 20 of 34 (785 Views)
Professor

Re: It's time for a shift in contract terms......

I would try to get away from exclusive contracts with phones too.  I would love to see use purchase phones and service separately, like we do for land lines.  You don't buy your TV from the cable company, light bulbs from the electric company, or water faucets from the water company.  Of course that would only work for the SIM card phones and not for the phones that need to be programmed by the carrier.  And, once LTE gets rolled out there will not be a need for network specific phones, since all carriers will be LTE.

Message 21 of 34 (767 Views)
Expert

Re: It's time for a shift in contract terms......


sitnsidewayz wrote:

wingrider01 wrote:

FredW wrote:

If we did away with contracts and the phones became available for sale in the general retail market (once again, like wired service phones), competition would drive the price of phones down.  Remeber when landline phones started being sold in department stores?  Prior to that, at&t would charge hundreds of dollars for a phone.  After they were sold in department stores, prices got so cheap that now landline phones are almost disposable.  Granted, I don't see cell phones getting that cheap, but I would not be surprised if the price cut in half.  Also, if not locked into contracts and available to change carriers easily, I would expect to see the cost of service go down.


You might see a 10 - 15 percent drop from the advertised retail price, considering that most, are specific to a type of carrier - GSM or CDMA and there will still be exlusive devices for a carrier. I doubt you will ever see a Atrix or a Iphone for a unsubsidized price that is near the subsidized price of the phone. back when the 3GS 8GB first released the price by VodaPhone in Italy was about 449 Euros or about 770 USD at that time,  O2's price was about 810 GBP or about 1,580.00 USD at the time.

 

Pricing for then was obtained here - which was published about the time the 3GS was announced on 06/09 

 

http://news.softpedia.com/news/iPhone-3G-Will-Actually-be-Expensive-in-Europe-87877.shtml


If subsidized pricing goes away, the branding of and exclusivity of devices would need to go too. I don't believe it would cost any more for manufactures to start making devices that would run on CDMA with a SIM slot for GSM and the various bands required for all the carriers. The ability to streamline manufacturing and eliminate the development of different ROMS for different carriers would offset the costs of the added technology. I'm not saying it would happen quickly, but eventually due to all devices being operational with all the carriers, the competition would drive prices downward. Then the ability of a customer to leave when he wants and still use his/her device at  full capacity with another carrier would drive the cost of service down. Unfortunately, this is good old America where corporate greed and lobbying rule. The carriers would fight this all the way.


Sorry I doubt te exclusivity will ever go away, the income from specialty ads are way to lucrative not to mention the "I WANT THAT ONE" draw of specific phones. Add to teh fact as per your statemend that manufacturers will start adding both GSM and CDMA capabilities down the road - maybe in 3 or 4 years after this happens give hardware development cycles that project planning, while there are world phones, not many are designed and certified for sale in the US and the units sold outside the US, FCC approval proceedures can be very time consuming and expensive to obtain also - each indiviudal model requires the certification.

 

As far as your comment about "corporate greed" it would be a no brainer for this type model - the profit made on what ever they sell the phone above the manufactuers charge to them would be just that - pure profit, add to the service since the phone designs and frequencies in use would still have them locked to specific carriers.  I love capitalism!

Message 22 of 34 (754 Views)
Scholar

Re: It's time for a shift in contract terms......

Upcoming Snapdragon chips will support dual mode. GSM/CDMA & LTE. As we can see in the rest of the world,change is coming .......
Message 23 of 34 (734 Views)
Scholar

AndRe: It's time for a shift in contract terms......

And where's your proof......everyone says this. Theres no proof. Pure speculation. If u buy 50,000 phones,how much do u think each phone is gonna cost? Proof? ......Puleez! Theres noway a no contract phone should cost $600-$700.
Message 24 of 34 (729 Views)
Professor

Re: It's time for a shift in contract terms......


wingrider01 wrote:

sitnsidewayz wrote:

wingrider01 wrote:

FredW wrote:

If we did away with contracts and the phones became available for sale in the general retail market (once again, like wired service phones), competition would drive the price of phones down.  Remeber when landline phones started being sold in department stores?  Prior to that, at&t would charge hundreds of dollars for a phone.  After they were sold in department stores, prices got so cheap that now landline phones are almost disposable.  Granted, I don't see cell phones getting that cheap, but I would not be surprised if the price cut in half.  Also, if not locked into contracts and available to change carriers easily, I would expect to see the cost of service go down.


You might see a 10 - 15 percent drop from the advertised retail price, considering that most, are specific to a type of carrier - GSM or CDMA and there will still be exlusive devices for a carrier. I doubt you will ever see a Atrix or a Iphone for a unsubsidized price that is near the subsidized price of the phone. back when the 3GS 8GB first released the price by VodaPhone in Italy was about 449 Euros or about 770 USD at that time,  O2's price was about 810 GBP or about 1,580.00 USD at the time.

 

Pricing for then was obtained here - which was published about the time the 3GS was announced on 06/09 

 

http://news.softpedia.com/news/iPhone-3G-Will-Actually-be-Expensive-in-Europe-87877.shtml


If subsidized pricing goes away, the branding of and exclusivity of devices would need to go too. I don't believe it would cost any more for manufactures to start making devices that would run on CDMA with a SIM slot for GSM and the various bands required for all the carriers. The ability to streamline manufacturing and eliminate the development of different ROMS for different carriers would offset the costs of the added technology. I'm not saying it would happen quickly, but eventually due to all devices being operational with all the carriers, the competition would drive prices downward. Then the ability of a customer to leave when he wants and still use his/her device at  full capacity with another carrier would drive the cost of service down. Unfortunately, this is good old America where corporate greed and lobbying rule. The carriers would fight this all the way.


Sorry I doubt te exclusivity will ever go away, the income from specialty ads are way to lucrative not to mention the "I WANT THAT ONE" draw of specific phones. Add to teh fact as per your statemend that manufacturers will start adding both GSM and CDMA capabilities down the road - maybe in 3 or 4 years after this happens give hardware development cycles that project planning, while there are world phones, not many are designed and certified for sale in the US and the units sold outside the US, FCC approval proceedures can be very time consuming and expensive to obtain also - each indiviudal model requires the certification.

 

As far as your comment about "corporate greed" it would be a no brainer for this type model - the profit made on what ever they sell the phone above the manufactuers charge to them would be just that - pure profit, add to the service since the phone designs and frequencies in use would still have them locked to specific carriers.  I love capitalism!


You acknowledge the technology is there. Every device already requires FCC approval, nothing changes there. The only hold back is the business model that the carriers and manufacturers are clinging to. It's a boon for the carriers because they are subsidizing the devices at cost or for a small loss and locking in two years of profit on the service or selling the device at an over inflated price for non subsidized and locking in a nice profit that way. The manufacturers are more than willing to play along because the carriers do all the retail selling for them. It's easy money on their part. I do agree that it will be a tough business model to bust, mainly because to many consumers like it because it puts an over inflated expensive smartphone in their hands when normally they wouldn't be buying one. They are willing to trap themselves in TOS they may not agree with for that shiny new device and the carriers are eating it up. There are many articles to read where devices are torn down and priced by parts and manufacturing costs added in. The end result is the manufacturing costs of those fancy $500-$700 smartphones typically being in the $150-$250 range. Obviously the carriers here in the USA would hate to lose this business model. It's a major boon for them. Sure, they let you have service without a contract, but they have the manufacturers on their side, so they know the cost of moving to another carrier will still be costly due to devices being locked to and designed for specific carriers. I applaud Goggle for trying to break this model with the Nexus One, but their mistake was keeping the device over priced.
Message 25 of 34 (725 Views)
Professor

Re: It's time for a shift in contract terms......

In the days of landline only, the FCC stepped in and made the phone companies accept phones from other sources, ending the at&t lock on landline headsets (you had to rent your phone from at&t).  Although you can bring any phone in and use it on at&t, it has to be unlocked and is discouraged.  I would not think it unreasonable to think that the FCC may set in at some time to open the phone market so that exclusivity and sales of phones with a contract would not be allowed.  They did it with landlines years ago.

Message 26 of 34 (695 Views)

Re: AndRe: It's time for a shift in contract terms......

So you're saying you have no proof?  So are you saying that $35K Subaru is overpriced because the dealer isn't paying more than $15-20K by buying it at "wholesale" prices?  I think you vastly underestimate how much the carriers pay to the manufacturers even at wholesale prices.

 

 


Tilt-A-Rama wrote:
And where's your proof......everyone says this. Theres no proof. Pure speculation. If u buy 50,000 phones,how much do u think each phone is gonna cost? Proof? ......Puleez! Theres noway a no contract phone should cost $600-$700.

 

Message 27 of 34 (664 Views)
Scholar

Re: It's time for a shift in contract terms......

[ Edited ]

NOT!......"vastly underestimate"? Ur dreaming. No phone costs ATT more than $200. Give or take +/-.....Proof? Everyone knows what time it is. {Please keep it courteous}

Message 28 of 34 (653 Views)
Expert

Re: It's time for a shift in contract terms......

[ Edited ]

Tilt-A-Rama wrote:
NOT!......"vastly underestimate"? Ur dreaming. No phone costs ATT more than $200. Give or take +/-.....Proof? Everyone knows what time it is. {Please keep it courteous}

really "everyone knows what time it is"? Actually you are correct there again, anyone that has a watch or access to a mobile phone does know what time it is, that is a easy statement to "get a grip on". As far as wholesale cost of a telecommunications device, unless you are in the industry that deals with bulk pruchases of items you have no clue as to what a company pays for a device, nor the contractual terms regarding price and duration of contract that the buyer and seller have, outside of that you are making pure speculation.  It is easy to see this where you see 3rd party vendors that are selling unbranded phones for a lot more then the "$200" that you claim ATT is paying for them - that is unless you are accusing these 3rd party vendors of price fixing also.

Message 29 of 34 (636 Views)
Scholar

Re: It's time for a shift in contract terms......

Here wego again......speculation,proof? Give it up. I guess u never heard the expression,u know what time it is. Whatever ..... Ur sarcasm is misplaced. This is what time it is. The vendors will sell it at the same inflated price. Why?.....because that's what the market Will bear. Falls under supply & demand. U have heard of that? Comprende?
Message 30 of 34 (627 Views)
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