The point is it isn't selling. It's a brand new phone, three months old, and they have to give one away for free to get people to take them.
Verizon is actually in the business of selling contracts... not phones.
They will "give away" a phone in order to lock you into $90 a month for the next 24 months. It can be any phone... from a cheap flip-phone to a Note 2.
Apple doesn't allow their phones to be used in such promotions. But that's not a problem... Verizon doesn't care which phone you get as long as you're paying $90 a month for the next 2 years.
As for the Note 2 not selling.... who knows for sure. I doubt Verizon has a warehouse of 3 month old Note 2s that they are dying to get rid of.
Verizon always has a few phones used in BOGO promotions at any given time. Those phones aren't necessarily overstocks.
You already beat me to it, but it is really silly to cite the BOGO free offers as proof XYZ phone isn't selling well. The simple truth is Apple doesn't allow those promotions with their current phone and other manufacturers simply don't care.
Phone companies don't care what phone you buy. As stated above they sell contracts for a very expensive service and the phone is only a small percentage of the equation. An individual line on Verizon can be around $120 a month x 24 month contract which works out to $2,880. A bit less since you can usually upgrade before the 24th month so they can lock you in another 2 years and there are cheaper plans . You can always leave, but those ETF fees will make you pay for that "free" or discounted phone if you try and break your contract. As long as they get you in contract they don't care what you use.
So please stop using the BOGO free as any sort of proof the Note II or whatever phone isn't selling well. The Galaxy SIII by any measure sold very, very well and still is selling well nearly a year later. All any of us can do is offer our microscopic anecdotal evidence and our opinions. But I can also add that I rarely see iPhone's anymore like I used to but see large Android phones all over the place. I remember at Halloween waiting in a very long line at a haunted house being the only person with an iPhone while I observed dozens and dozens of Android phones with large displays. Even all the young kids and teenagers had one and some of these kids were very small, like under 5' tall with tiny hands but they sure didn't seem to have any trouble using them or putting them in their pockets. But even at clubs or expensive restaurants with all adults seeing an iPhone is becoming a bit more rare for me recently. All anecdotal for sure but when many other people all across the country are saying the same thing....
I bought an iPhone 4S so maybe I was counted among the people perfectly content with a 3.5" screen even though I wasn't. If Apple offer a larger iPhone than the current model I will buy one, and if they don't I will be joining my two other former iPhone owning friends and have to reluctantly buy an Android phone if I am left with no other choice to get what I want. One of those friends tried the iPhone 5 but took it back after a week and got the Note II simply because he couldn't tolerate the small screen. 2013 is the year where we will finally see if large phones are here to stay or not.
And? If they get $600 from Verizon for a phone do they really care if Verizon charges the customer $199 or gives one away for free? They still get their money so exactly why would or in fact should they care. You act as if modern business should be conducted along the lines of Victorian England and that is shameless or without honor. Get a clue, it is business.
And by the way you were dead wrong, I just saw that Verizon commercial and it said get a free FLIP COVER when you buy one. So your whole argument was just based on a lie. The Note II is $299 which is $100 MORE than the cheapest iPhone 5 and people are still buying them in huge numbers.
And? If they get $600 from Verizon for a phone do they really care if Verizon charges the customer $199 or gives one away for free? They still get their money so exactly why would or in fact should they care. You act as if modern business should be conducted along the lines of Victorian England and that is shameless or without honor. Get a clue, it is business.
And by the way you were dead wrong, I just saw that Verizon commercial and it said get a free FLIP COVER when you buy one. So your whole argument was just based on a lie. The Note II is $299 which is $100 MORE than the cheapest iPhone 5 and people are still buying them in huge numbers.
You make a lot of false presumptions. It's possible that Verizon has bought so many extra phones from vendors at $600 a pop and with a contract that doesn't allow them to return unsold merchandise which is forcing them to sell them Buy One, Get One Free but it's not very likely. Check the sale in the US. Which smartphone vendor sells the most high-end smartphones? Which smartphone vendor pulls customers from other carriers if they don't offer this brand? There is only one. Apple can easily get carriers to pay a premium for their product and carriers can easily recoup from a $400 subsidization to the customer with the iPhone, but you can't get that with any run of the mill Android smartphone. They don't even hold their value like an Apple product.
What more commonly happens is vendors make deals with distributors (carriers are also distributors in this case). If they sell the product, great, if not, they can send them back. The contracts are often complex in that they have to sell x-many before they can send any back otherwise face a penalty or buy x-many before they get a certain discount. This is how channel stuffing works to prop up shipping numbers on the books, but it only works for a short time. At some point you have to move those devices or write them off. What is likely happening with most BOGO is the vendor is giving the vendor a huge discount on the product if they help sell them. They both win in that the carrier can advertise a great bargain and the vendor can move more product that hopefully is getting some profit even if it's minuscule.
Pot, may I introduce you to Mr. Kettle. Unless you are a very high ranking executive from one of the carriers, everything you said was pure speculation and conjecture. Guess you missed the part about the Note II not being part of a BOGO which was the purpose of that post. It is selling for $299 and people are buying it. So how do you explain that? Or how do you explain how well the SIII is doing? or so many other phones that actually compete with for the same customers as Apple. All those cheap or free Android phones are useless for comparison because those customers are probably children or people who just want a phone mainly for voice and text as a flip phone replacement or people who simply can't afford a higher end phone. I am sure all of them would prefer an iPhone or a SIII if they had a choice in the matter.
Who are you to say that only the iPhone draws people to another carrier. The #1 draw to any carrier often has little to do with any phone at all. Usually coverage is the main factor, along with price, discounts, and many other factors. Android is available on all carriers and a multitude of devices unlike the iPhone which was only available on AT&T until very recently. People don't need to switch to another carrier for an Android phone since each carrier has a very large selection to choose from.
Pot, may I introduce you to Mr. Kettle. Unless you are a very high ranking executive from one of the carriers, everything you said was pure speculation and conjecture.
You really need to learn to comprehend what you read.
The manufacturers understand their relationship with the carriers. The manufacturers get paid when the carriers order a phone... and the carriers get paid when a customer signs a 24 month contract.
Samsung doesn't care what happens to the phone after it leaves their warehouse. Why should they? Their work is done.
I've seen many phones from all manufacturers advertised for BOGO on the sign outside of a Verizon store.
As has been stated before... I doubt the phones used in the BOGO promotions are simply the result of a massive overstock.
Verizon (and all carriers in the US) are only concerned with selling you service with a contract. Whatever they have to do to get you in the door and sign up... they will do it.
I don't know exactly how Verizon gets phones from a manufacturer... but I doubt they ordered millions of the Note 2 ahead of time and now they are over-run with them.
I would imagine each Verizon store gets shipments multiple times per week. Since they offer dozens of different products from flip-phones to smartphones, tablets and mobile hotspots... I bet they only carry a limited stock.
BOGO phones are just a way to sweeten the deal to get you to sign a contract. That's it. Carriers have offered "free" phones for years... so all those phones the result of an overstock?
No.... it's just how carriers push subsidized phones to make money on the contract. Because the contract, after all, is how Verizon makes money.
The point is it isn't selling. It's a brand new phone, three months old, and they have to give one away for free to get people to take them.
And their giving iPhone 5's away for no upfront cost as well so not sure what your point is. Whatever deals carriers offer has no bearing on how well a device is selling, its all about the contract. The phone manufacturer still gets paid for the device and the carrier makes their money over the lifetime of the contract.
edit - I see this bit of the discussion was based on a false assumption anyway, but my point still stands.
There's no doubt that at times, sales are simply to get rid of stock.
As I pointed out, though, BOGOs don't really give a "free" phone... not even close. It's just two phones, each at 1/2 of the usual UPFRONT downpayment.
Also, BOGOs require that BOTH lines have to be either new or ready for upgrade. So a line subsidy is being used for both, and both require a two year contract which will pay back the carrier far more than the small amount they gave up for the lower phone sale.
Here are some numbers just for fun, to get us thinking about what happens behind the scenes:
iPhone = retail $650, or $200 with two year contract.
Note = retail $700, or $300 with two year contract.
Right away, we see that people are willing to pay $100 more upfront for the Note 2, even though the retail difference is only $50. Now let's estimate what the carrier costs likely are:
iPhone = wholesale $650 - user $200 = $450 carrier subsidy (20 months to recoup)
Note = wholesale ~ $550 - user $300 = $250 carrier subsidy. (11 months to recoup)
Here the upfront cost is reversed. Carriers pay more out of pocket for the Apple product, because it brings in customers who are only willing to spend up to $200. (This high subsidy is why carriers want to push non-Apple products. This is also why analysts worry that if carriers drop the subsidy model, Apple might be in real trouble in the US.)
Now, if Verizon were to do a BOGO on the Note (which they haven't yet), it would be something like this (leaving out wholesale discounts for buying more than the usual number of devices):
Note = wholesale $550 - user $150 = $400 carrier subsidy (17 months to recoup)
Still less to the carrier than the cost for an iPhone, AND they've locked in TWO subscribers for 24 months.
BOGO is more difficult for the iPhone, because with only $100 upfront, the carrier would not recoup their subsidy until right at, or slightly after, 24 months.
(Most phones wouldn't cost as much as the Note 2, btw, so BOGO would be even better a deal for the carrier.)
Source Notes: Sprint has said subsidies are 40% higher for Apple than other makers. AT&T has said it takes average 20 months to recoup subsidies for iPhone. More details can be found in this profit analysis, among others.
You were wrong, like so many other times before you also refused to be the bigger person. Why can't you just be an adult and admit it for once. There is no BOGO free on the Note II from Verizon. It was for a case.
What is also galling is that you don't even have a modern smartphone. At least you didn't the last time you posted so please correct me if I am wrong. You said you had a 1st generation iPhone that was given to you. For someone that doesn't even own a modern iPhone or an Android, you sure do have a lot of opinions. Exactly what would it take for Apple to make to get you to upgrade to a new iPhone and ditch your dinosaur? Everyone else here at least owns and uses new phones so we can speak from experience from daily use. All your opinions are second hand.
Comments
Quote:
Originally Posted by Gatorguy
If those big-screen devices are truly "embarrassingly large" then it won't be something Apple offers, nor will they be market successes for others.
And some people thought that Apple would never offer a smaller iPad...
Quote:
Originally Posted by Tallest Skil
Verizon.
Got a link to anything that shows the Verizon Note 2 in a BOGO deal? (If anything, I think it was BOGO for a cover.) Thanks!
Quote:
Totally missing the point.
Why go for BOGO anything else, when you could instead get two iPhone 4 in a GOGO deal (Get One Free, Get One Free)
Maybe it's because people want the model they're getting.
Prices are not the sole reason why a phone is popular, especially in the USA where people tend to spend $100 - $300 extra for a top of the line model.
Otherwise the FREE iPhone 4 would outsell the iPhone 4S and 5.
Originally Posted by KDarling
Got a link to anything that shows the Verizon Note 2 in a BOGO deal? (If anything, I think it was BOGO for a cover.) Thanks!
It was an ad on TV. I'll take a picture if I see it again.
Why go for BOGO anything else, when you could instead get two iPhone 4 in a GOGO deal (Get One Free, Get One Free)
The point is it isn't selling. It's a brand new phone, three months old, and they have to give one away for free to get people to take them.
Bottom line: If Apple offered a larger screened phone... I would buy it instead of the smaller one.
Verizon is actually in the business of selling contracts... not phones.
They will "give away" a phone in order to lock you into $90 a month for the next 24 months. It can be any phone... from a cheap flip-phone to a Note 2.
Apple doesn't allow their phones to be used in such promotions. But that's not a problem... Verizon doesn't care which phone you get as long as you're paying $90 a month for the next 2 years.
As for the Note 2 not selling.... who knows for sure. I doubt Verizon has a warehouse of 3 month old Note 2s that they are dying to get rid of.
Verizon always has a few phones used in BOGO promotions at any given time. Those phones aren't necessarily overstocks.
They are simply used to sell... contracts.
You already beat me to it, but it is really silly to cite the BOGO free offers as proof XYZ phone isn't selling well. The simple truth is Apple doesn't allow those promotions with their current phone and other manufacturers simply don't care.
Phone companies don't care what phone you buy. As stated above they sell contracts for a very expensive service and the phone is only a small percentage of the equation. An individual line on Verizon can be around $120 a month x 24 month contract which works out to $2,880. A bit less since you can usually upgrade before the 24th month so they can lock you in another 2 years and there are cheaper plans . You can always leave, but those ETF fees will make you pay for that "free" or discounted phone if you try and break your contract. As long as they get you in contract they don't care what you use.
So please stop using the BOGO free as any sort of proof the Note II or whatever phone isn't selling well. The Galaxy SIII by any measure sold very, very well and still is selling well nearly a year later. All any of us can do is offer our microscopic anecdotal evidence and our opinions. But I can also add that I rarely see iPhone's anymore like I used to but see large Android phones all over the place. I remember at Halloween waiting in a very long line at a haunted house being the only person with an iPhone while I observed dozens and dozens of Android phones with large displays. Even all the young kids and teenagers had one and some of these kids were very small, like under 5' tall with tiny hands but they sure didn't seem to have any trouble using them or putting them in their pockets. But even at clubs or expensive restaurants with all adults seeing an iPhone is becoming a bit more rare for me recently. All anecdotal for sure but when many other people all across the country are saying the same thing....
I bought an iPhone 4S so maybe I was counted among the people perfectly content with a 3.5" screen even though I wasn't. If Apple offer a larger iPhone than the current model I will buy one, and if they don't I will be joining my two other former iPhone owning friends and have to reluctantly buy an Android phone if I am left with no other choice to get what I want. One of those friends tried the iPhone 5 but took it back after a week and got the Note II simply because he couldn't tolerate the small screen. 2013 is the year where we will finally see if large phones are here to stay or not.
Originally Posted by Michael Scrip
Apple doesn't allow their phones to be used in such promotions.
The most telling is that Samsung does.
Quote:
Originally Posted by Tallest Skil
The most telling is that Samsung does.
And? If they get $600 from Verizon for a phone do they really care if Verizon charges the customer $199 or gives one away for free? They still get their money so exactly why would or in fact should they care. You act as if modern business should be conducted along the lines of Victorian England and that is shameless or without honor. Get a clue, it is business.
And by the way you were dead wrong, I just saw that Verizon commercial and it said get a free FLIP COVER when you buy one. So your whole argument was just based on a lie. The Note II is $299 which is $100 MORE than the cheapest iPhone 5 and people are still buying them in huge numbers.
You make a lot of false presumptions. It's possible that Verizon has bought so many extra phones from vendors at $600 a pop and with a contract that doesn't allow them to return unsold merchandise which is forcing them to sell them Buy One, Get One Free but it's not very likely. Check the sale in the US. Which smartphone vendor sells the most high-end smartphones? Which smartphone vendor pulls customers from other carriers if they don't offer this brand? There is only one. Apple can easily get carriers to pay a premium for their product and carriers can easily recoup from a $400 subsidization to the customer with the iPhone, but you can't get that with any run of the mill Android smartphone. They don't even hold their value like an Apple product.
What more commonly happens is vendors make deals with distributors (carriers are also distributors in this case). If they sell the product, great, if not, they can send them back. The contracts are often complex in that they have to sell x-many before they can send any back otherwise face a penalty or buy x-many before they get a certain discount. This is how channel stuffing works to prop up shipping numbers on the books, but it only works for a short time. At some point you have to move those devices or write them off. What is likely happening with most BOGO is the vendor is giving the vendor a huge discount on the product if they help sell them. They both win in that the carrier can advertise a great bargain and the vendor can move more product that hopefully is getting some profit even if it's minuscule.
Quote:
Originally Posted by SolipsismX
You make a lot of false presumptions.
Pot, may I introduce you to Mr. Kettle. Unless you are a very high ranking executive from one of the carriers, everything you said was pure speculation and conjecture. Guess you missed the part about the Note II not being part of a BOGO which was the purpose of that post. It is selling for $299 and people are buying it. So how do you explain that? Or how do you explain how well the SIII is doing? or so many other phones that actually compete with for the same customers as Apple. All those cheap or free Android phones are useless for comparison because those customers are probably children or people who just want a phone mainly for voice and text as a flip phone replacement or people who simply can't afford a higher end phone. I am sure all of them would prefer an iPhone or a SIII if they had a choice in the matter.
Who are you to say that only the iPhone draws people to another carrier. The #1 draw to any carrier often has little to do with any phone at all. Usually coverage is the main factor, along with price, discounts, and many other factors. Android is available on all carriers and a multitude of devices unlike the iPhone which was only available on AT&T until very recently. People don't need to switch to another carrier for an Android phone since each carrier has a very large selection to choose from.
You really need to learn to comprehend what you read.
The manufacturers understand their relationship with the carriers. The manufacturers get paid when the carriers order a phone... and the carriers get paid when a customer signs a 24 month contract.
Samsung doesn't care what happens to the phone after it leaves their warehouse. Why should they? Their work is done.
I've seen many phones from all manufacturers advertised for BOGO on the sign outside of a Verizon store.
As has been stated before... I doubt the phones used in the BOGO promotions are simply the result of a massive overstock.
Verizon (and all carriers in the US) are only concerned with selling you service with a contract. Whatever they have to do to get you in the door and sign up... they will do it.
I don't know exactly how Verizon gets phones from a manufacturer... but I doubt they ordered millions of the Note 2 ahead of time and now they are over-run with them.
I would imagine each Verizon store gets shipments multiple times per week. Since they offer dozens of different products from flip-phones to smartphones, tablets and mobile hotspots... I bet they only carry a limited stock.
BOGO phones are just a way to sweeten the deal to get you to sign a contract. That's it. Carriers have offered "free" phones for years... so all those phones the result of an overstock?
No.... it's just how carriers push subsidized phones to make money on the contract. Because the contract, after all, is how Verizon makes money.
Quote:
Originally Posted by Tallest Skil
The point is it isn't selling. It's a brand new phone, three months old, and they have to give one away for free to get people to take them.
And their giving iPhone 5's away for no upfront cost as well so not sure what your point is. Whatever deals carriers offer has no bearing on how well a device is selling, its all about the contract. The phone manufacturer still gets paid for the device and the carrier makes their money over the lifetime of the contract.
edit - I see this bit of the discussion was based on a false assumption anyway, but my point still stands.
Originally Posted by reefoid
And their giving iPhone 5's away for no upfront cost as well
Is this even a legitimate website? Apologies, but I often can't tell with British sites…
And since O2's official plan at £31 has the phone at £179… I really wouldn't trust whatever that is to give me legitimate information.
Quote:
Originally Posted by Tallest Skil
Is this even a legitimate website? Apologies, but I often can't tell with British sites…
And since O2's official plan at £31 has the phone at £179… I really wouldn't trust whatever that is to give me legitimate information.
They're one of the largest independent phone retailers in the UK, so yes the information is legitimate.
However, seeing as this part of the discussion was all based on a false declaration by yourself, its all irrelevant now.
edit - and even the 02 site is showing the iPhone 5 with no upfront cost, so another false declaration. Twice on one page, good going!!
There's no doubt that at times, sales are simply to get rid of stock.
As I pointed out, though, BOGOs don't really give a "free" phone... not even close. It's just two phones, each at 1/2 of the usual UPFRONT downpayment.
Also, BOGOs require that BOTH lines have to be either new or ready for upgrade. So a line subsidy is being used for both, and both require a two year contract which will pay back the carrier far more than the small amount they gave up for the lower phone sale.
Here are some numbers just for fun, to get us thinking about what happens behind the scenes:
iPhone = retail $650, or $200 with two year contract.
Note = retail $700, or $300 with two year contract.
Right away, we see that people are willing to pay $100 more upfront for the Note 2, even though the retail difference is only $50. Now let's estimate what the carrier costs likely are:
iPhone = wholesale $650 - user $200 = $450 carrier subsidy (20 months to recoup)
Note = wholesale ~ $550 - user $300 = $250 carrier subsidy. (11 months to recoup)
Here the upfront cost is reversed. Carriers pay more out of pocket for the Apple product, because it brings in customers who are only willing to spend up to $200. (This high subsidy is why carriers want to push non-Apple products. This is also why analysts worry that if carriers drop the subsidy model, Apple might be in real trouble in the US.)
Now, if Verizon were to do a BOGO on the Note (which they haven't yet), it would be something like this (leaving out wholesale discounts for buying more than the usual number of devices):
Note = wholesale $550 - user $150 = $400 carrier subsidy (17 months to recoup)
Still less to the carrier than the cost for an iPhone, AND they've locked in TWO subscribers for 24 months.
BOGO is more difficult for the iPhone, because with only $100 upfront, the carrier would not recoup their subsidy until right at, or slightly after, 24 months.
(Most phones wouldn't cost as much as the Note 2, btw, so BOGO would be even better a deal for the carrier.)
Source Notes: Sprint has said subsidies are 40% higher for Apple than other makers. AT&T has said it takes average 20 months to recoup subsidies for iPhone. More details can be found in this profit analysis, among others.
Originally Posted by reefoid
However, seeing as this part of the discussion was all based on a false declaration by yourself, its all irrelevant now.
False declaration my foot.
Quote:
Originally Posted by Tallest Skil
The Galaxy Note 2 is already buy one get one free. Three months after launch. I love it.
Which was proved to be wrong. So yes, false declaration your foot.
Originally Posted by reefoid
Which was proved to be wrong.
No. Sorry. It is.
Quote:
Originally Posted by Tallest Skil
No. Sorry. It is.
You were wrong, like so many other times before you also refused to be the bigger person. Why can't you just be an adult and admit it for once. There is no BOGO free on the Note II from Verizon. It was for a case.
What is also galling is that you don't even have a modern smartphone. At least you didn't the last time you posted so please correct me if I am wrong. You said you had a 1st generation iPhone that was given to you. For someone that doesn't even own a modern iPhone or an Android, you sure do have a lot of opinions. Exactly what would it take for Apple to make to get you to upgrade to a new iPhone and ditch your dinosaur? Everyone else here at least owns and uses new phones so we can speak from experience from daily use. All your opinions are second hand.