Originally Posted by Marvin
Thing is, everyone is paying this price. It gets worked into the contract. If you get tied to a 24 month contract and Apple take $20 per month off the tariff, you are paying $480 + $199 to get the phone = $679.
AT&T will get say the remaining $20 from the tariff + $15/m data +$20/m texting = $55/m * 24 = $1320. You don't have to take the texting package but I'm sure a few people would.
It's just an expensive phone, unlocked or not. I don't really see why it is the case though because while the 8GB iPod Touch has some inferior specs, it's way down at $229. I don't see how adding some phone parts and a nice camera adds over $400 to the price.
The sooner manufacturers get the iPod Touch mods that give you a basic phone add-on to an iPod Touch the better.
Not from around here, are you.
What you are missing is that in the US, if you buy the unlocked phone you are paying twice
. First, you pay the full price for the phone. Then you pay the full price (ie, the same price as somone who got the phone for $450 less), for the service plan (aka, tariff).
In your normal/locked scenario, Apple gets it's $20/month and ATT get it's $20 a month (excluding data and texting).
In the unlocked scenario, Apple gets it's $480 upfront, but you still pay ATT $40/month and they keep it all instead of giving $20 to Apple. It's actually quite a bonanza for ATT, the only risk being that you don't stick with them for the full 24 months. But in the US, where else are you going to go?
The only reason it works is be too many of my fellow Americans are too cheap and/or short sighted that all we focus on is the initial upfront cost. So subsidized phones look like a great deal. If there were more people willing to buy unlocked phones, there'd be a bigger market for the carriers to compete by offering discounted service plans for non-subsidized phones.
The other annoying thing is that carriers are really "double-locking" us into their service. First, they only sell locked phones. Second, they make you sign a two-year contract. Why do they need both? Subsidizing an unlocked phone by tying it to a two-year contract is just as effective as locking the phone, especially with the high early termination fees. There's a risk that after the contact ends we'll take our phone to another carrier, but most people get a new phone every two years or so anyway, so it's irrelevent if it can be moved to a new carrier or not.
Maybe once both ATT and Verizon have their LTE networks more fully deployed, and if Apple continues to sell unlocked iPhones of the LTE variety, then we might get a little competition between carriers for earning the business of unlocked iPhone owners. But untiil then, it will have very little effect.