Verizon soaking high end Android buyers to make up for iPhone subsidies - Page 3

Better people buy iPhones?

How exactly do you define "better people" ?

By the way, when you say things like "iPhoners are certainly more intelligent and better looking than Androiders" it makes you sound like an ignorant child.....

Android will have the majority of the market. However, there will be less vendors making android phones because many of them aren't getting enough profit out of it. Meanwhile, Apple will keep selling record amount of phones in each quarter and have a clear majority of the profits.

And the fact Android is expanding is because the lifespan of an android phone is maybe a year and they have to replace it.

we can say the same about you. Have fun with your laggy screen scroll, unresponsive button pushes, and buggy software. But it's "open". And i did own an android phone and there have been several times where I threw the damn thing because I was so frustrated with it.


Enjoy! I can't wait for the 5" and 6" android phones to come out. bigger is better!

Wow, 6% that means Apple have TRIPLED their marketshare over the last few years.

Why don't you take a look at what that means in DOLLAR terms, you know dollars those things you can buy stuff with, like stores to service people's needs, call centre's full of staff to serve people's needs, research departments full of people ready to serve people's future needs, music, movies, developers all ready to meet people's needs because Apple has the dollars to pay for it all...

...out of their very small market share.

Without profits, there will be advancement. Thanks for proving you don't know much about tech or business.

There is no break down of how many of any particular model of the high end Android Phones are selling. Just the overall number of phones, including the free and low price ones are rolled into the numbers.

So I prove you are clueless and you quip Google does not update Androids UI all the time (though they do) and see the fact you have to reskin Android with custom ROMs as a plus. Wow. Classic.

Then, from your flawed logic, the iPhone's sales are flat YoY?

First, Microsoft is an "it" not a "they." So you probably meant to write "it's business model." Moreover importantly, it's business model was illegal. Microsoft was found criminally liable for intentionally abusing its monopoly position.


Was it's actions immoral or unethical? Well that depends on your take of intentionally violating the anti-trust laws. Microsoft is 1) lucky there was a change of who was President, and 2) the judge in the case made public comments on the case. Otherwise, it would have been broken up.

So at the end of the day we have a cheaper Android phones selling for the same price as an iPhone, which is already at a loss in terms of relative value when you wish to sell it later on to get a new model, but since Android phones don't hold their value as well as iPhones they are doubly disadvantaged. I can't imagine what argument a savvy business person could make on that, but I do know people buy worthless crap every day so I am sure these people exist in droves.


PS: I am looking forward to some in-depth iCS reviews. I'm hoping that after 4 years Android has finally worked out all those annoying kinks that hinder the user experience that iOS had refined from day one, or in the case of copy/paste refined since 3.0.

Wow I have never seen one person totally clueless and ignore more facts presented to him lol.
This is the funniest thread I have seen in a long time. Thanks for the entertainment hella

Verizon, just like any retailer, sets prices for profit and market share. They sunk a LOT of advertising and branding into Droid, 100% of which benefitted Motorola and the couple of other Droid-labeled sets. That allowed them to hold onto their #1 market position, which AT&T was otherwise in danger of knocking off. Cost them how many millions? Where is that in the cost calculation?

They also realized that whatever some Android advocates might have claimed, if they wanted to win over iPhone customers from AT&T, they'd have to actually carry the iPhone, not just offer a just as good alternative. So they negotiated w/ Apple to get the phone at the best price they could, and struck co-marketing deals, etc. Nobody held a gun to their head. Apple customers tend to be very loyal and surely Verizon appreciates the fact that they're not going to jump to T-Mobile when Google decides to do some big promo there.

So the post misses the big picture: carriers are oligopolies and do what they can to maximize current and future profits. They've ALWAYS played handset manufacturers off against each other to maximize CARRIER profits, keeping the handset mfrs barefoot and pregnant. Just that Apple doesn't need to play that game. The Android sets come from shops that've NEVER made the big bucks; the carriers capture the profits.

I will never buy another Android phone to save my life. I bought my son, 14, his 1st phone about 4 months ago. It was before Apple started heavily discounting the 3GS and IP4 8GB models. My son wanted something different than my iphone as well. I think that was peer pressure induced! I paid $199.00 for the Pantech Breakout 4G from Verizon. It is actually not that bad of a phone to be honest with you, but I just don't like Androids GUI at all. The phone was a brand new model as well. To this date they have not issued one update to fix little bugs, they won't say or tell us anything about being able to upgrade to ICS either. The last time I checked you could get the phone for free with a 2 year contract! A 4 month old phone that had just came out is already free.

It seems that every day there is a new Android phone coming out. I like new technology like everyone else, but could you imagine if you were an Android fan and always had to have the latest phone? You would go broke\

I chalk this one up to being one of those dumbass decisions we all make sometimes. He will never have anything but an iPhone from here on out.

Both the Verge and Engadget had some fairly detailed reviews. The on at the Verge was prior to an incremental update (bug fixes AFAIK). Not sure about the version Engadget opined about.

http://www.engadget.com/2011/12/01/a...ndwich-review/
http://www.theverge.com/2011/11/17/2...y-nexus-review

And none of that matters does it? Android fails utilization tests. There is a reason why, even with iOS's and Android similar unit share, we have:

1) Developer profits about 10:1 different on iOS compared to Android.

2) application starts on iOS far outpacing Android.

3) far more quality apps on iOS than Android. Do you really need 1000 "hello world" apps in the Android Market.

4) far more apps on iOS than Android even though the the App Store is only 4 months older than the Android Market.

5) higher download rates of apps on iOS than Android. It took the App Store 6 months less time to reach 10 billion downloads.

6) malware is one developer area Android is winning.

iOS may not get plurality share but that does not matter. It will get the most apps. It will get the best enterprise support. It will get the best apps. It will get the best 3rd party support.

Since we're predicting...

5 years

Who Knows - 5%
WinPhone - 15%
iPhone - 30%
Android - 50%

Sorry to distract you all from a really entertaining troll war....

DED missed the true take-away from the pricing data, and simply focused on "justifying" his stupid linkbait headline. The real take-away is that the carriers have lots of good reasons to subsidize the iPhone more heavily that an Android phone.

There could be many good business reasons the iPhone subsidy is higher:

1. Apple handles the retail for, I am guessing, 50% of carrier's iPhones. What is the retail markup for a high-end phone - $100? So compared to Android phones, carriers averages $50 less overhead cost on an iPhone, just for retail sales costs.

2. What is the comparable return rate? All reports suggest they are much lower for the iPhone.

3. We know that hardware retention is much greater with the iPhone. This certainly has some spill-over to carrier retention, the most valuable investment for any carrier.

4. Support costs have to be much less for an iPhone. For no other reason than Apple handles a large chunk of it.

5. iPhones are reported to use significantly less data that Android phones. Some of this is the software, some may be behavior. But in any case an iPhone user costs the carrier less in monthly data bandwidth, which also has a huge impact on infrastructure costs.

6. Because Apple allows no carrier-provided software to be pre-installed, there are no software development costs, whereas an Android phone incurs that incremental up-front cost for the carrier. This cost may be recouped over the life of the phone, but then again, do we know that?

7. With so many models to stock, and some not selling out, the carriers have higher inventory costs with Android phones, compared to iPhones which have only a few models and always sell out.

And I am sure there are many additional reasons an iPhone can be sold with a higher subsidy.

Given all the above, I am surprised the carriers don't offer iPhones for free! Just the higher customer retention is worth $hundreds to a carrier.

That's unlikely to happen. Apple is holding the deck and will keep dealing Android and Google deuces while keeping all the high cards and face cards to itself. At some point in the near future, Apple will probably corner the NAND flash market and the hi-res display market and will leave only table scraps for competitors. Apple is already starting to force competitors out of the tablet business and will likely do the same in the smartphone business. Companies can only survive on profits and the majority of Android vendors are only going to come up with losses.

You obviously fail to understand the economics of the situation which is immense economies of scale. Apple will have about an $88 billion cash hoard at the end of the year and there's really nothing that Apple can't afford to do. Apple is carrying more cash than most of its rivals total market cap. Apple has become the proverbial 800 lb. gorilla in the mobile industry and will eventually be a 1000 lb. gorilla. If Apple wanted to, it could probably knock $100 down across the board for all of its mobile products and leave rivals literally gasping for air. It wouldn't even hurt Apple all that much and (in theory, only limited by production) exponentially increase market share. Apple doesn't need to do anything that drastic but it certainly is capable of doing so.

Your theory of Apple being left with only a tiny amount of mobile market share just doesn't hold water because the Apple retail stores alone wouldn't allow that to happen. Consumers actually like Apple products and they're not merely settling due to a product being cheaper. At this point in time, the only thing that is preventing Apple from having greater smartphone market share is that Apple can't produce enough iPhones to keep up with demand. Apple's iPhone momentum is going to literally suck the profits out of the Android platform and once that happens, Android growth will grind to a halt. Android's financial model is already on the verge of collapse since it never had much strength to begin with.

Who ushered in multitouch smart phones? Gyroscopes? Artificial intelligence? Video chat? App stores as we know them today? iTunes on a phone? AirPlay? Retina displays? Antenna deisigns never before tried? iTunes match? iCloud? Photo streaming to my computer? Visual voicemail? 1 click purchasing? I can buy a brand new Mac on my phone, walk into an Apple store and have my order brought to me without ever approaching a salesman. I can send text messages to my mom's iPad or my wife's iPod touch right from my phone. I can buy a new phone today, put in my iCloud credentials and pick right up where I left off on my old phone - including app data and same in-game location etc. I can tell my phone to remind me to pick up supper when I leave work, it sets up a geo-fence around my location, and reminds me the minute I leave the area. I can take a picture on my phone and it will wirelessly sync to my computer, iPad etc. I just asked my iPhone will I need an umbrella tomorrow... It actually answered me back.

And somehow you think adding a faster processor or a bigger screen is taking us to new heights.

Just because Verizon charges $100 more for their high-end Android phones doesn't necessarily mean Android users are WILLING to pay more than iPhone users. It just means Verizon charges more for their Android phones because they can. If carriers were allowed to charge whatever they wanted for the iPhone you don't think people would pay $299 or $399 for the entry model? You better believe the majority of iPhone users would, as would I, to avoid anything Android, BlackBerry or Windows.

At this point in time most people have already made up their mind which ecosystem they want to be a part of (Apple or Google). These people will pay whatever the cost, within reason, to stay with their choice.

Great post! I agree 100%

I feel like this article is just trying to push the "Android sucks, iPhone rules" view. But all I see from this is Verizon is greedy... screwing everyone it can, in any way it can.

In other words, what's new?

FWIW, Verizon wants $300 for the Galaxy Nexus, available tomorrow. Go to Amazon today and get the same Nexus phone with Verizon contract and it's just $150.

LOL - the justice department and the EU both disagreed with you! That's why MSFt was fined heavily and put on probation for years.

Once the contract is paid off, the price difference between the phones is nearly inconsequential. Or so I'm reminded around here whenever someone suggests getting a "free" 3GS rather than the most expensive iPhone 4S.

Maybe I missed it in the thread, but why hasn't anyone brought this up.

Verizon "soaking" people happens at the monthly bill level, not at the up-front cost level.
Granted, charging $100 for an Android phone means they don't lose as much money up-front, but in the end they're still making out like bandits.

Of course, if the high-end Android user does decide to upgrade every 6-12 months as some would suggest, charing $100 more for the initial phone (subsidized) does make sense.

If you think all of these questions have the same answer, you're very wrong. I'll let the objective and more knowledgeable members of this forum correct your delusions, lest I be labeled a troll... The first one to point out five blatant discrepancies wins.

Incorrect. Money is all businesses care about... and pleasing shareholders with that money. (You can't buy things with market share)

Android is the market share leader... which is great for Google and their advertising business.

However... for the companies who actually sell these phones... I wouldn't celebrate just yet.

Samsung is the leader in Android phones... but the rest of the manufacturers are struggling to break even. HTC will make money this quarter, despite slashing their Q4 earnings outlook. But Motorola and LG actually lost money for the past few quarters.

So yes... Android (Google) can claim a victory in market share. And that looks great on a Powerpoint slide.

But if you're trying to sell phones... just because they're running Android doesn't mean it's a profitable business.

Absolutely correct. There's a segment of the Android device makers that seem to be in a race to the bottom. That can reflect badly on the OS when the devices are poorly designed. By the same token there's some of them who really are concentrating on good design and better build. IMO companies like Asus, HTC and Samsung are making a sincere effort at quality devices, and Sammy in particular is seeing some success and profits with them (at least in smartphones). I don't see much hope for Android tablet sales tho. I expect MS to eventually be the one to challenge Apple there if anyone does.

It looks like the US prices are higher than here in canada. At Bell in Montreal the 16g 4S is 160$, the 8g 4 is 50$ and the Samsung Nexus is 160$.

But my contract for my 4S is 50$ per month for 1g/month, 200 mins voice.

Always in the future - fingers in ears - lalalalalalala \

By the way, this site was never better than when Apple was utterly in the minority. The difference with today, market share and trolls.

Instead of making predictions... let's look at what is actually happening right now.

You're right... the Mac is a "niche" in terms of market share. No argument there.

So let's look at the company who has the most market share in desktops... HP

HP was actually considering getting out of the PC business because there's no money in it.

Repeat... the world's largest PC manufacturer doesn't think it's a good business to be in.

Further proof that market share is just a number... and nowhere near the top of any company's list of priorities.

So is market share still the greatest thing ever?

Now back to phones. In case you haven't noticed, Android already has more market share than Apple.

And what happened? Did that prompt Apple to scrap their phone division?

Haha... no...

I think the real question is how long will carriers keep subsidizing the iPhone to the current level? They must be saying to Apple "The iPhone is costing us $100 more than high end Android phones; we want to reduce your subsidy."

In 5 years Android will be a distant memory of a failed attempt...

Your argument would be much better if you divided your thoughts into paragraphs... Pregnant pauses drive the day!

I have never believed that there were any covert ops that had people pose as fans in order to make fans look bad.

Now, I'm not so sure.

The point is that the iPhone has the leverage to accomplish this while "Android" does not.

Also that Android fans pay a premium to get anything that's not Apple.

Marketshare is only useful if you can parlay it into something profitability.

For example, with greater marketshare, you should be able to attract more developers and more quality apps which contribute to a better user experience.

actually, that's kind of how businesses work. low margin items are subsidized by higher margin items and used to attract customers.

also, that's not a logical fallacy; it's based on business concepts, not logical ones

The unit sales are up, but as of the end of last quarter, market share was flat.

The i4S introduction, along with the FreeGS may well change things.

Don't critics say Apple is nothing more than a fashion symbol?

So why are you criticizing Apple not significantly changing the aesthetics while ignoring the internals?