"Is America getting over its smartphone subsidy addiction?"

[Destroyallcubes]

Different payments for different phones. For instance the HTC M8 and Galaxy S5 are about 28 dollars a month while the iPhone 5c is about $22 a month.

eah exactly. Some people may not save with easy pay. A contract on framily will be $60 a line if you have 7+ in your framily. Which is $20 cheaper than Tmobiles $80 unlimited. If you compare apples to apples framily is cheaper with a contract compared to with a phone. That is if you can handle getting an upgrade every two years.

[chgoguy80]

But you are paying full price with a 2 year agreement. Just over a longer term.

 

But you don't never have, plus on the initial say $199 you always pay less than that if one is smart and looks around. EasyPay you pay the full retail price.

 

I had the same standpoint, but consider this. Best case scenario your bill is $45 with data on Framily. Add $30 for your device financing. That's the same $30 you're paying extra on your bill each month for being in a 2-year contract ($75 a month). But after those 2 years (when your device is paid off), your bill isn't dropping back to $45.

 

But the numbers you list are no where near what contract pricing is for many/most of us longtime customers on say 5 line plans.You sight $45+$30=$75/month Framily then if you don't want a new phone its $45/month.

 

On contract we pay $42.50/line for unlimited data AND free/discounted (got S3 for $99 near launch and service credit covered most of the cost and activation fees waived) upgrades every 20 months. For many of us Framily, even if you go through the terrible hassle of finding people is just a huge price increase.

 

I can see where Framily is a good deal for those with 1 or 2 lines and have been overpaying in the past.

[cletus]

Honestly? I will never be under contract again unless my employer pays for most or all of the cost. I've moved to an MVNO (Ting) and bought my own phones for about a year now. I find the idea of paying $700 for a phone or having an inflated bill to pay off a phone really weird in a world where the $300 Nexus 5, $300 Moto X, and $300 OnePlus One exist.

 

I get how it works better for some people but I think it is the same experience I had cutting Cable TV. Now that I don't pay for it I wonder why I ever did. (if that makes sense). 

[jamisonshaw125]

Honestly? I will never be under contract again unless my employer pays for most or all of the cost. I've moved to an MVNO (Ting) and bought my own phones for about a year now. I find the idea of paying $700 for a phone or having an inflated bill to pay off a phone really weird in a world where the $300 Nexus 5, $300 Moto X, and $300 OnePlus One exist.

 

I get how it works better for some people but I think it is the same experience I had cutting Cable TV. Now that I don't pay for it I wonder why I ever did. (if that makes sense). 

I guess it really depends on what device you WANT, not need. I WANT an iPhone, so I prefer contract over not. If I didn't care about having an iPhone, the nexus 5 would work fine for me...especially since its off contract. Same goes for people that WANT "higher end" android devices like the g2, or g3 or htc m8 etc....

[Keitarou]

Keeping the subsidy model is what makes that handset cost an inflated $700.  So, it becomes a vicious cycle.

 

AJ

 

Exactly. With prices being 600+ for a phone, as people realize they must pay full price now, phones prices might come down to earth. Should be somewhere around 300-450. That's what I think it should be.

[clbowens]

Exactly. With prices being 600+ for a phone, as people realize they must pay full price now, phones prices might come down to earth. Should be somewhere around 300-450. That's what I think it should be.

 

I still don't see the prices of phones going down, especially since now with the no contract plans, we have the monthly phone payment plans.  They are going to get their money one way or the other.

[Keitarou]

I still don't see the prices of phones going down, especially since now with the no contract plans, we have the monthly phone payment plans.  They are going to get their money one way or the other.

 

Sure they are. But the buyers mentality changes in that now everyone knows you are paying 650 or more vs. 200 for 2 year contract. Knowing that might change buyer behavior. That's all we can hope for in order to bring prices down. Supply and demand.

[travismheim]

Didn't phone prices lower shortly after easy pay launched? When I was in the store to change my plan, I noticed the G2 was down to $500 (back in February) and the nexus 5 was down to $400 from $450.

 

Sent from my Nexus 5 using Tapatalk

[clbowens]

Didn't phone prices lower shortly after easy pay launched? When I was in the store to change my plan, I noticed the G2 was down to $500 (back in February) and the nexus 5 was down to $400 from $450.

 

Sent from my Nexus 5 using Tapatalk

That's because they are old phones.  :-)

[MacinJosh]

That's because they are old phones. :-)

Not necessarily. According to the LG G3 contest going right now, the ARV of the G3 is listed at $500. This could be an indicator of lower pricing for phones in the near future.

 

 

Sent from Josh's iPhone 5S using Tapatalk 2

[WillM]

I still don't see the prices of phones going down, especially since now with the no contract plans, we have the monthly phone payment plans. They are going to get their money one way or the other.

That's because a 0% loan for 24mo. is basically a subsidy. It's better than the hidden subsidy in that it exposes the full retail price of the phone but so far it hasn't made prices fall. Now if carriers got rid of payment plans too prices would crumble but I doubt we'll see that happen.

[JWMaloney]

Everyone tends to forget how many people rushed out to buy the $600 unsubsidized iPhone when it was first released. I can see prices decreasing, but not by much.

[WillM]

Everyone tends to forget how many people rushed out to buy the $600 unsubsidized iPhone when it was first released. I can see prices decreasing, but not by much.

Nowhere near as many as bought them for $199 or down to free. Remember too that there was no competition then either. I doubt Apple wants to go back to that model. 

[JimBob]

Everyone tends to forget how many people rushed out to buy the $600 unsubsidized iPhone when it was first released. I can see prices decreasing, but not by much.

The first iPhone's price was quickly dropped by $200 two months later.

 

The phone went back to "full price" in 2008 with the iPhone 3G because Apple got AT&T to begin subsidies.

[nicholaaaas]

I agree with everything, but I still like the 2 year however.

Never again

 

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[joshnys8913]

Never again

 

Sent from my SM-T217S using Tapatalk

........?

[chgoguy80]

I still don't see the prices of phones going down, especially since now with the no contract plans, we have the monthly phone payment plans.  They are going to get their money one way or the other.

Exactly.

 

Sure they are. But the buyers mentality changes in that now everyone knows you are paying 650 or more vs. 200 for 2 year contract. Knowing that might change buyer behavior. That's all we can hope for in order to bring prices down. Supply and demand.

 

I really doubt it, at least due to subsidies. Competition possibly could cause some drop as people realize they do not HAVE TO HAVE AN iPhone and Android gets more competitive with the G3 etc challenging Samsung and non-high end phones being good enough for many most people.

 

And here is why I think so. Framily plans are good for some that want to give up unlimited data and rarely replace phones and really bad for others especially if you want unlimited data and replace your phone every 20 months to 2 years. Though the US is a big market when you compare retail prices here in the US to Europe where phone subsidies from what I read are NOT done and haven't been done for a longtime at least.

 

One would think the full retail price would be lower than here (based on no subsidy = lower price) since people have to pay for the full cost. But again from what I have seen for the iphone and high end Android their prices are actually quite a bit higher than the US. If no subsidy there ends up in even higher prices why would you think ending subsidies here would lower them?

Edited May 29, 2014 by chgoguy80

[WiWavelength]

But again from what I have seen for the iphone and high end Android their prices are actually quite a bit higher than the US.

 

That comparison does not work.  Shop for any consumer electronics in Europe, for example, and prices tend to be significantly higher than in the US because of exchange rates, tariffs, VAT, and other market differences.

 

AJ

[S4GRU]

Everyone tends to forget how many people rushed out to buy the $600 unsubsidized iPhone when it was first released. I can see prices decreasing, but not by much.

Based on how many iPhones are sold nowadays, there weren't a lot, really. If they dropped the subsidies tomorrow, it would probably be about the same amount of people who can afford an iPhone cash at that price as back in 2008.

 

However, things have changed since then. There are likely a lot more people now that would be willing to spend more than they can afford because of the attraction to the brand. There are a lot more iPhone/Apple fanatics now than there was back in 2008. And smartphones are no longer just a geeky novelty.

 

However, there are also a lot of price sensitive iPhone owners too. People who want an iPhone, but only have it because of the subsidy. And this is probably close to 50% of iPhone owners now. If they had to pay full cash price for them, they may purchase a less expensive Android device next time that cost half. Even if just half of them did, it would make a huge dent in iPhone sales.

 

So in a completely cash model, all flagship phone makers (not just Apple) have to consider lowering their prices to keep sales numbers and total profit up. Even Apple would feel pressure in time to lower prices or offer some less expensive entry products.

 

Robert via Samsung Note 8.0 using Tapatalk Pro

[jamesinclair]

Sure they are. But the buyers mentality changes in that now everyone knows you are paying 650 or more vs. 200 for 2 year contract. Knowing that might change buyer behavior. That's all we can hope for in order to bring prices down. Supply and demand.

 

Arent Europeans also paying 600+ and without subsidies?