Softbank - New Sprint - Discussion

[GiantJay]

I was going to post this...Amazon/Best Buy might be hurting soon because they're going to be forced out of the commission they get from contract upgrades. Bestbuy's very reliant on it's mobile section and with this removal I'm interested in seeing what they'll do. The other bad is that with the removal of contracts (while still being bound by phone monthly payments), means Sprint/any other carrier can change terms and conditions on the fly because you're not in contract with them anymore. And now if T-Mobile leaves, Sprint will no doubt raise prices.

That's not good news at all. Where did you hear this and when is it going to happen? And what do you mean by commission? Getting money for the contract or selling the phone itself?

 

Sent from my Nexus 5 using Tapatalk

 

 

[Rocket87]

That's not good news at all. Where did you hear this and when is it going to happen? And what do you mean by commission? Getting money for the contract or selling the phone itself?

 

Sent from my Nexus 5 using Tapatalk

They only get paid for the contract. With subsidised phones the actual phone is sold at a loss.

 

Sent from tapatalk

 

 

[Ascertion]

That's not good news at all. Where did you hear this and when is it going to happen? And what do you mean by commission? Getting money for the contract or selling the phone itself?

 

Sent from my Nexus 5 using Tapatalk

Sprint gives BestBuy a decent payout once the phone has been active after a given time period. That's how they can afford selling phones for $1 on contract. They make no initial profit, but Sprint sends them a check later on once the customer is locked into the two year contract. If Sprint removes the upgrade price, Best Buy will be forced to charge full retail and it'll kill the business. Not just Sprint, but it appears all carriers are moving that way now.

 

Sent from my LG-LS980

 

 

[bigsnake49]

Maybe Best Buy can use their volume buying purchasing might to lower their wholesale prices on phones. They can also make money on the financing part. and then sell you accessories. Just like the other electronics they sell.

[WiWavelength]

I actually hate this! I will never be buying a phone from sprint again.

 

Yup, you were just the kind of person I was thinking of when I wrote that facetious "WTF" reaction post.

 

AJ

[WiWavelength]

If Best Buy wants to drop the price of a $650 device to $500 one weekend, will sprint be willing to easy-pay that lower amount, or is amount amortized by Sprint going to be rigid?

Maybe Best Buy can use their volume buying purchasing might to lower their wholesale prices on phones. They can also make money on the financing part. and then sell you accessories. Just like the other electronics they sell.

 

bigsnake has it right.  Easy Pay should be through Sprint only.  Best Buy and other third parties will be free to set up their own financing plans.  Finance a device through Best Buy, and Sprint will not be materially involved -- at least, that is how this new non subsidy model should work.

 

AJ

[GiantJay]

They only get paid for the contract. With subsidised phones the actual phone is sold at a loss.

 

Sent from tapatalk

Not true we make money on some phones.

 

Sent from my Nexus 5 using Tapatalk

 

 

[Johnner1999]

bigsnake has it right. Easy Pay should be through Sprint only. Best Buy and other third parties will be free to set up their own financing plans. Finance a device through Best Buy, and Sprint will not be materially involved -- at least, that is how this new non subsidy model should work.

 

AJ

 

Not to mention I assume bestbuy pays near full boat for the phone, currently. Where as I assume that will change.....

 

 

Sent from my iPhone using Tapatalk

[Rawvega]

When asked about a possible merger with Sprint, Legere said T-Mobile needed more airwaves and other resources to take on Verizon Wireless and AT&T Inc. -- something consolidation could provide. Sprint’s majority owner, SoftBank Corp., is in discussions about combining the carrier with T-Mobile, according to people with knowledge of the matter.

 

“We all need better scale and capability,” he said in a televised interview with Emily Chang on “Bloomberg West.” “The question starts to be: How do you take the maverick and supercharge it? We either need more spectrum and capability and a lot more investment, or we need consolidation.

 

Read more at:

 

http://www.bloomberg.com/news/2014-01-24/t-mobile-ceo-says-sprint-deal-could-help-crack-wireless-duopoly.html?cmpid=yhoo

[digiblur]

If it was up to you, wouldn't you want to go that route?

I already did.

[supert0nes]

Maybe with the end of financing phones, we will actually be closer to their normal cost. Iphone 5s should not cost more than $300 contract free at Best Buy.  That might even be too high.

[bigsnake49]

Maybe with the end of financing phones, we will actually be closer to their normal cost. Iphone 5s should not cost more than $300 contract free at Best Buy.  That might even be too high.

 

Yeah right! With a BOM of $199, there is no way it will sell for $300 at Best Buy!

[supert0nes]

Yeah right! With a BOM of $199, there is no way it will sell for $300 at Best Buy!

 

 

I knew my guess was a little high.  $250

[bigsnake49]

Read more at:

 

http://www.bloomberg.com/news/2014-01-24/t-mobile-ceo-says-sprint-deal-could-help-crack-wireless-duopoly.html?cmpid=yhoo

 

Don't be surprised if the T-Mobile management team ends up running the combined company. Masa really likes their aggresiveness. The Sprint team is not exactly enthused about the merger. T-Mobile's pushing for it.

Edited January 24, 2014 by bigsnake49

[Rawvega]

You could be right. However, I don't think Son would push Hesse out, especially after extending his contract last year. The rest of the executives probably have cause for concern though.

 

Sent from my SM-N900P using Tapatalk

 

[Fraydog]

I would think that no subsidies would push phone prices down. See Europe as an example of this.

[Johnner1999]

Don't be surprised if the T-Mobile management team ends up running the combined company. Masa really likes their aggresiveness. The Sprint team is not exactly enthused about the merger. T-Mobile's pushing for it.

Fingers are crossed!!!

 

 

Sent from my iPhone using Tapatalk

[utiz4321]

Maybe with the end of financing phones, we will actually be closer to their normal cost. Iphone 5s should not cost more than $300 contract free at Best Buy. That might even be too high.

According to the best guesses I have seen the 5s cost 200 to build. Add shipping cost and a 60 percent mark up (low apple probably will mark up over 80, just a guess though) that puts best buying the phone for around 350-375. Given that best buy makes any where between 200 and 400 per contract they light up (old and approximate numbers) and assuming they won't want to see a major hit, the entry level iPhone 5s should run about 550 at best buy off contract. And I think that is where it will end up.

[WiWavelength]

Don't be surprised if the T-Mobile management team ends up running the combined company. Masa really likes their aggresiveness. The Sprint team is not exactly enthused about the merger. T-Mobile's pushing for it.

 

You actually think that staid Japanese executives want to work with a jeans and T-shirt wearing CEO who drops F bombs right and left???  That would be like putting an MTV "Real World" house in the West Bank, then casting the show with Jews and Palestinians.

 

AJ

[WiWavelength]

Fingers are crossed!!!

 

Heck no!  The pink Batman needs to go.

 

AJ

[evancg]

According to the best guesses I have seen the 5s cost 200 to build. Add shipping cost and a 60 percent mark up (low apple probably will mark up over 80, just a guess though) that puts best buying the phone for around 350-375. Given that best buy makes any where between 200 and 400 per contract they light up (old and approximate numbers) and assuming they won't want to see a major hit, the entry level iPhone 5s should run about 550 at best buy off contract. And I think that is where it will end up.

 

I think the bigger shift will have to be on Best Buy's part and how cell phone sales work into their overall business plan.

 

I imagine if retailers are buying phones for $350 - $375, they won't be able to mark them up $200 just because that's the profit they were earning previously. Once contract incentives go away, unsubsidized cell phones will sell like any other high dollar product - prices based on supply, demand, and the lowest they can sell it for while still earning a business sustaining profit.

 

Best Buy won't be able to sell a phone for $550 just to make $200 profit if Amazon and Wal-Mart are selling the same phone for $450.

 

Edit to add: This is, of course, not counting the supposed "Apple tax" or that the $200 estimates for how much the iPhone 5S costs to make doesn't really account for research and development - all dollar amounts are just examples!

[utiz4321]

I think the bigger shift will have to be on Best Buy's part and how cell phone sales work into their overall business plan.

 

I imagine if retailers are buying phones for $350 - $375, they won't be able to mark them up $200 just because that's the profit they were earning previously. Once contract incentives go away, unsubsidized cell phones will sell like any other high dollar product - prices based on supply, demand, and the lowest they can sell it for while still earning a business sustaining profit.

 

Best Buy won't be able to sell a phone for $550 just to make $200 profit if Amazon and Wal-Mart are selling the same phone for $450.

 

Edit to add: This is, of course, not counting the supposed "Apple tax" or that the $200 estimates for how much the iPhone 5S costs to make doesn't really account for research and development - all dollar amounts are just examples!

They do now. But 200 may be to high. However, I think there will be a healthy margin on cell phones as long as people can "make it part of their plans" by putting on the bill and don't have to front the cost. The wildcard might be the carriers oddly enough. They don't really care all that much about making a mark up on the device. They care about subs and that might pressure them to sell the phones closer to cost.

[caspar347]

Go ahead and call me a biased hater (I kinda am) but I'm a bit tired of T-Mobile and their followers acting like they are doing a reverse-takeover to get Sprint's spectrum and acting like Sprint doesn't even have a network (and that their's is way better). I know I'm probably just misinterpreting things, but to me it seems like nobody will end up giving Sprint any credit for the network they have spent years fixing and everyone will assume it was T-Mobile's. At this point, I'd like to see how long T-Mobile lasts on its own before it hits an expansion brick wall (No fiber outside of HSPA+ zones) and how long it takes for Sprint to regain its reputation without T-Mobile. I know it doesn't matter. But that's just my opinion.

[bigsnake49]

Go ahead and call me a biased hater (I kinda am) but I'm a bit tired of T-Mobile and their followers acting like they are doing a reverse-takeover to get Sprint's spectrum and acting like Sprint doesn't even have a network (and that their's is way better). I know I'm probably just misinterpreting things, but to me it seems like nobody will end up giving Sprint any credit for the network they have spent years fixing and everyone will assume it was T-Mobile's. At this point, I'd like to see how long T-Mobile lasts on its own before it hits an expansion brick wall (No fiber outside of HSPA+ zones) and how long it takes for Sprint to regain its reputation without T-Mobile. I know it doesn't matter. But that's just my opinion.

 

Sprint deserves a lot of credit for all they work that they have done the last couple of years. But the man that wrote those big checks gets to do what he wants. And right now he wants T-Mobile's managerial team and he wants the HQ out of Overland Park.

Edited January 25, 2014 by bigsnake49

[bigsnake49]

You actually think that staid Japanese executives want to work with a jeans and T-shirt wearing CEO who drops F bombs right and left???  That would be like putting an MTV "Real World" house in the West Bank, then casting the show with Jews and Palestinians.

 

AJ

 

Laugh all you want, but Masa is not your typical staid executive.