|09-10-2012, 09:40 AM||#1|
Join Date: Mar 2012
The Hidden Cost of Device Subsidies
Without subsidies, customers will be more selective with their smartphones. Price will play an important factor. With price competition (price war) profit margin for the phone manufacturers will drop. Consumers win.
Look at the HDTV market.
Look at the PC/laptop market.
We will see the same intense "price competition" in tablets.
Smaller margin for manufacturers = more saving for consumers.
Even something like this would be a win for consumers.
A 2 year contract will be separated into two segments as part of the bill:
- wireless service monthly cost
- hardware monthly cost
A crude example:
-a wireless service with unlimited talk, text, 5GB of data for $70 a month.
-a hardware cost monthly (for a $600 device / 24 months = $25 a month)
Total cost $95 a month
If a customer opts for a $300 device instead, that person will be charged
-$70 a month for the wireless service
- $12.5 a month for the hardware
Total cost: $82.5 a month
By opting for the $300 device instead of $600 device, the consumer will save $12.5 a month.
Phone manufacturers will now be in a price war with each others like they are in HDTV, laptop, PCs, and tablets. Subsidies (paid for by the consumers) distort the open market.
Last edited by Top100EbooksRank; 09-10-2012 at 10:02 AM.
|09-10-2012, 11:46 AM||#2|
Join Date: Jun 2008
Device: Sony PRS505, Nook Color(CM7), iPad3
Going by this you are forced to believe that manufacturing is the only thing in the world that actually costs money. Research and design is free. Packaging is free. Distribution and warehousing are free. Retail staff work for no money. There is no such thing as corporate overhead. Malls just give away floor space to anyone who wants it. Government don't want any taxes.
And it isn't just Apple, for any new release the same 'analysis' is done. I'm sure in the next few days we'll be told how much Amazon is/isn't making on the new Fire models, and it will be just as useless as this article.
(Having said all that, the iPhone is still really expensive anyway)
|09-10-2012, 12:01 PM||#3|
Join Date: Nov 2006
Device: Kindle Voyage, iPad Mini, iPhone 4, MS Surface Pro, N7
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