They want subsidies to end, but they won't really cut their rates for people who bring their own equipment. Right now they make a huge amount of money by selling subsidized and then when the contract ends, they get to keep the amount that previously went to paying off the phone. Their only goal is to charge customers more one way or another. Plus carriers insist on locking phones and refuse to allow you to bring your own. Verizon will only allow you to have a phone if you buy it from them or from the Apple store. You cannot bring your own phone.
Fair point but what makes you think it'd be better? Could Apple build a better network or would it be the same type of service or will you think it's better because it's Apple? Kinda like a 'placebo effect'.
Verizon will only allow you to have a phone if you buy it from them or from the Apple store. You cannot bring your own phone.
That's not true at all. People buy pre-owned Verizon phones all the time. Phones can be purchased from Amazon, and recently directly from Motorola and then activated with VZW. It's still short from T-Mobile and AT&T but it's not as bad as you make it out to seem.
The sooner consumers are forced to buy a smartphone and know real pricing, the sooner they will realize iPhone's are overpriced. The amount they charge for more memory on them is ridiculous. How can Apple actually justify charging $849 for 64GB 5s?
they are really worth allot less than the price. these phones are high margin. Especially the ones with more ram.
Pointing to AT&T, it is ridiculous for him to say they can't afford to sell phones bundled with their plans. they probably found it more profitable to do it otherwise. and T-Mobile has been handily beating them for new consumers.
Also AT&T is back to monopoly status. with $32.3 Billion in revenues in 3rd quarter 2013 alone. Their wireless margin of profit runs 30-42% depending on the accounting method.
Yes, AT&T overcharges and is swimming in cash. Nuts.
They want subsidies to end, but they won't really cut their rates for people who bring their own equipment. Right now they make a huge amount of money by selling subsidized and then when the contract ends, they get to keep the amount that previously went to paying off the phone. Their only goal is to charge customers more one way or another. Plus carriers insist on locking phones and refuse to allow you to bring your own. Verizon will only allow you to have a phone if you buy it from them or from the Apple store. You cannot bring your own phone.
'Their only goal is to charge customers more one way or another'
But that's what we all want, right? (Sorry couldn't resist the SJ quote)
You are right though. They are a business and their goal is to make money. The market demographic has changed. A little over 5 years ago the majority of people didn't have smart phones and there was a huge sea of people flocking to them that needed networks. It made a lot of sense for carriers to say "Join my network and I'll give you this super fancy phone for cheap or free even!" Once one did it, they all had to or they wouldn't get customers.
The demographic has changed. The market isn't growing like crazy, and most people that want a smartphone already have one. They are not going to stop being smartphone users because the carrier stops dangling a "free" phone in front of them.
Verizon is still subsidizing so the market should speak. It may be that Apple and high end Samsung users flock to Verizon since AT&T stopped giving expensive phones away for cheap. Verizon will have to increase its rates to support the subsidies. The users that don't use the fancy phones are more likely to flee Verizon for T-mobiles and AT&T's less expensive options.
The change makes good business sense for AT&T as long as subscribers don't leave because of it. AT&T doesn't have to offer their services cheaply unfortunately, they just have to be slightly cheaper than the limited competition in the carrier field.
Stop using words when you don’t know what they mean.
The amount they charge for more memory on them is ridiculous. How can Apple actually justify charging $849 for 64GB 5s?
The vast majority of consumers feels that this is fair pricing. VAST majority. They justify it because people pay it and WANT to pay it.
they are really worth allot less than the price.
No, you’re utterly wrong.
Also AT&T is back to monopoly status. with $32.3 Billion in revenues in 3rd quarter 2013 alone. Their wireless margin of profit runs 30-42% depending on the accounting method.
I can see how this would hurt Apple, but t's hard to see how this would benefit AT&T. They would certainly make less money off of people like me--I'm grandfathered into the unlimited data plan, and have kept it even though I don't typically use all that much data, and I also don't get a new phone as soon as I qualify. If they forced me to get a pay-as-you-go plan, I would definitely pay less, since the unlimited plan costs more than the current offerings. If I wait until the next release to replace my 4S, I'll pay AT&T for a year of subsidy, without receiving that subsidy (and I've already started to do that as of October). If they stop subsidizing handsets they will have to drop their prices to compete with T-Mobile, but this would force the apples-to-apples comparisons that T-Mobile is probably hoping for.
Phone subsidies are the carrot that carriers used to get people to sign 2 year contracts. The advantage of the 2 year contract is that it makes it more difficult to jump ship to another carrier. Without any subsidies, there is little reason to sign a contract, and carriers will see far more churn when that happens. The cost of signing up a new customer is far greater than the cost of maintaining a customer.
Since the majority of people actually do switch devices every couple years, the net result to the carrier is going to be minimal change. However, it's easier to market your calling plans as cheaper, with a monthly phone price tacked on, making the subsidy completely transparent. However, the carrier will now lose the bonus profit for those that don't upgrade immediately when they are eligible, as their bill will then decrease.
Higher end phone manufacturers will lose out, as the cost of the phone is now more apparent, and people will be less likely to want to pay that amount for the phone. When it's buried into the cost of the plan, people will gravitate towards higher end devices.
With this change, you'll see a race towards cheaper phones, which does not generally equate to a better product.
People that aren't happy with AT&T or any other carrier stop moaning and change carriers. There are 4 major and dozens more pre-paid options to choose from from at every price under the sun. My best friend recently switched from AT&T to Ting and is saving around $45 a month over what he used to pay. He is using an iPhone 4s on Ting by the way. So there are choices out there so vote with your wallet and not with comments on a forum AT&T will never read if you are unhappy.
Even if they go this route- AT&T direct service is still expensive. What about the breakup roaming deal with T-Mobile? Do you basically get the AT&T network for free with T-Mobile? T
AT&T pricing included the 'subsidy' for the handset. THEY aren't paying for it. They're selling it to you over 18~24 months. The cost of the handset was built into the rates.
The scam was, they continued charging exactly the same monthly fee to you, even if they are NOT 'subsidizing' the handset (you bring your own or your handset is 'paid off').
Now what he's essentially saying, based on his "we could have made more money" comment, is that they're going to charge roughly the same (or more) for the same services AND tack the "payments" for the hardware on top?
Basically, pay more for less, and ensure even higher profits for AT&T, the NSA's #1 fan and partner in mobile surveillance in the US?
I was an AT&T customer once. I will never, EVER repeat that mistake. They are the very definition of a nickel-and-dime-you-to-death, rip-off corporation.
Although probably not a lot better, I pay T-Mobile a $60 a month flat fee, and get all the service I need. Unlimited talk and text, 2.5GB of 4G/LTE data, tethering (I've used it with both my iPad and MacBook, and it works great. They just share the data plan basically), no 'hidden/add-on' fees. Data overage throttles to 3G. I haven't gone over yet though.
The connectivity has been pretty solid so far, so I'm sticking with them for now.
i only pay 40 a month tax included with everything unlimited but slower speed after 1GB most ppl on contracts pay 100+.
it good to have gsm phone and a google voice number then u can change monthly until u r satisfied and u know the price is only going down.
I am so glad tmo didnt merge with att more competition is great for consumers.
and now u can get top of the line unlocked phone for only 350 from google. google is forcing the prices lower coz it doesnt depend on sales for its profit i am sure some companies must be pretty mad about that
Now what he's essentially saying, based on his "we could have made more money" comment, is that they're going to charge roughly the same (or more) for the same services AND tack the "payments" for the hardware on top?
Ah, no. Did you see this from another article? "Wireless customers who bring their own device, buy a handset without a subsidy, or have their current contract expire will see their monthly data share bill drop by an average of $15 per month, AT&T announced on Thursday."
They're dropping current prices, then adding a 24-month payment plan on top for subsidized phones.
Obviously the scheme is a win for AT&T, but it's not the total ripoff you make it out to be.
I wish Apple offered their own wireless service. I'd dump AT'n'T in a California minute.
I did. I'd been living abroad the past couple of years, and went with T-mobile when I got back this time around. I bought my own handset from the Apple Store, and signed on to T-mobile's $60 a month tier.
$60. That's the price, that's what I pay. Period. Not like AT&T's so-called $60 a month service, which is just a $60 *base price*, PLUS $3 more for this, and $5 more for that, and oh, $18 more for fees, taxes, and by the time you're done you're actually paying something like $90 for that "$60 tier" (which includes a pathetic amount of data, so you're almost guaranteed to pay overages or upgrade to a more expensive tier). Most people I know are paying $120 to $150 to AT&T for their iPhone service, and not really getting a whole lot more from it than I do for $60 at T-mobile.
I did the math as well. I bought a 64GB iPhone 5s up front for $850. I'll probably use it for 3 years (my previous two iPhones lasted at least that long), and then flip it to a new model. Based on history, I'll get about $200 back for my current handset (5s) on resale. So my actual cost is more like $80 a month factoring in the cost of the handset. ($60 for service + about $20/month for the handset over 3 years). Beats the $120 a month I was paying to AT&T for less service/data previously. A 33% savings!
That's just part of why I say screw 'em. I'm never going back.
Despite what Tallest says, it is stupid what Apple charges when you want a phone with more flash memory. There is no way in the sane world Apple can justify its prices, except that they can get away with it. That people still don't have a choice - if they want iPhone, they pay Apple's prices, whether they like it or not.
I have wondered for long, why so many people have a totally unreasonable hatred towards Apple - and I think it is because the company makes extremely desirable products, which you really want to buy, but then sets prices that are very high - carrying huge profit margins. Some people buy the phone still, but there are a lot of people that ultimately don't buy it, because they just can't afford it. A lot of these people are frustrated - because the same appeal and image Apple products have, is denied to them, just because they cannot or will not pay Apple's bloated prices.
It is natural for these Apple to have a hatred towards Apple and to hope for Apple to fail. A lot of people will be thrilled if Apple makes a mistake, and falls flat on its face.
To a large extent, Apple is to blame for this. The prices they set, and the margins they expect are without doubt on the higher side.
It is this bad karma that is accumulating as millions of people who hate Apple, and are just waiting for other technologies to become realistic alternatives. Once Android reaches that place, Apple will struggle - and that's the reason for Apple's aggression in the courts against Android.
I agree. I was with AT&T before and switched to Sprint and also couldn't be happier with the service and especially my bill. Unlimited LTE not to mention unlimited texts and calls for $50 a month is fantastic.
Comments
Fair point but what makes you think it'd be better? Could Apple build a better network or would it be the same type of service or will you think it's better because it's Apple? Kinda like a 'placebo effect'.
That's not true at all. People buy pre-owned Verizon phones all the time. Phones can be purchased from Amazon, and recently directly from Motorola and then activated with VZW. It's still short from T-Mobile and AT&T but it's not as bad as you make it out to seem.
Except a decent OS and usable screen.
Except a decent OS and usable screen.
I think that post is a SPAM post. It makes no sense at all and doesn't have anything do with the conversation with this article.
they are really worth allot less than the price. these phones are high margin. Especially the ones with more ram.
Pointing to AT&T, it is ridiculous for him to say they can't afford to sell phones bundled with their plans. they probably found it more profitable to do it otherwise. and T-Mobile has been handily beating them for new consumers.
Also AT&T is back to monopoly status. with $32.3 Billion in revenues in 3rd quarter 2013 alone. Their wireless margin of profit runs 30-42% depending on the accounting method.
Yes, AT&T overcharges and is swimming in cash. Nuts.
http://www.att.com/gen/press-room?pid=24925&cdvn=news&newsarticleid=37119&mapcode=corporate|financial
They want subsidies to end, but they won't really cut their rates for people who bring their own equipment. Right now they make a huge amount of money by selling subsidized and then when the contract ends, they get to keep the amount that previously went to paying off the phone. Their only goal is to charge customers more one way or another. Plus carriers insist on locking phones and refuse to allow you to bring your own. Verizon will only allow you to have a phone if you buy it from them or from the Apple store. You cannot bring your own phone.
'Their only goal is to charge customers more one way or another'
But that's what we all want, right? (Sorry couldn't resist the SJ quote)
You are right though. They are a business and their goal is to make money. The market demographic has changed. A little over 5 years ago the majority of people didn't have smart phones and there was a huge sea of people flocking to them that needed networks. It made a lot of sense for carriers to say "Join my network and I'll give you this super fancy phone for cheap or free even!" Once one did it, they all had to or they wouldn't get customers.
The demographic has changed. The market isn't growing like crazy, and most people that want a smartphone already have one. They are not going to stop being smartphone users because the carrier stops dangling a "free" phone in front of them.
Verizon is still subsidizing so the market should speak. It may be that Apple and high end Samsung users flock to Verizon since AT&T stopped giving expensive phones away for cheap. Verizon will have to increase its rates to support the subsidies. The users that don't use the fancy phones are more likely to flee Verizon for T-mobiles and AT&T's less expensive options.
The change makes good business sense for AT&T as long as subscribers don't leave because of it. AT&T doesn't have to offer their services cheaply unfortunately, they just have to be slightly cheaper than the limited competition in the carrier field.
Stop using words when you don’t know what they mean.
The vast majority of consumers feels that this is fair pricing. VAST majority. They justify it because people pay it and WANT to pay it.
No, you’re utterly wrong.
Money = monopoly? Profit = monopoly?
Finally something on which we can agree.
I can see how this would hurt Apple, but t's hard to see how this would benefit AT&T. They would certainly make less money off of people like me--I'm grandfathered into the unlimited data plan, and have kept it even though I don't typically use all that much data, and I also don't get a new phone as soon as I qualify. If they forced me to get a pay-as-you-go plan, I would definitely pay less, since the unlimited plan costs more than the current offerings. If I wait until the next release to replace my 4S, I'll pay AT&T for a year of subsidy, without receiving that subsidy (and I've already started to do that as of October). If they stop subsidizing handsets they will have to drop their prices to compete with T-Mobile, but this would force the apples-to-apples comparisons that T-Mobile is probably hoping for.
of course it would be better but with as we know with any technology
take the digital camera or the LCD tv prices always fall even when the technology gets better
of course u have 4k Tvs which cost shitload but most ppl wont buy into them until they become cheaper
of course there will be curves phones which will cost alot more but they will be niche.
its great for consumers the get great tech for cheap
Phone subsidies are the carrot that carriers used to get people to sign 2 year contracts. The advantage of the 2 year contract is that it makes it more difficult to jump ship to another carrier. Without any subsidies, there is little reason to sign a contract, and carriers will see far more churn when that happens. The cost of signing up a new customer is far greater than the cost of maintaining a customer.
Since the majority of people actually do switch devices every couple years, the net result to the carrier is going to be minimal change. However, it's easier to market your calling plans as cheaper, with a monthly phone price tacked on, making the subsidy completely transparent. However, the carrier will now lose the bonus profit for those that don't upgrade immediately when they are eligible, as their bill will then decrease.
Higher end phone manufacturers will lose out, as the cost of the phone is now more apparent, and people will be less likely to want to pay that amount for the phone. When it's buried into the cost of the plan, people will gravitate towards higher end devices.
With this change, you'll see a race towards cheaper phones, which does not generally equate to a better product.
People that aren't happy with AT&T or any other carrier stop moaning and change carriers. There are 4 major and dozens more pre-paid options to choose from from at every price under the sun. My best friend recently switched from AT&T to Ting and is saving around $45 a month over what he used to pay. He is using an iPhone 4s on Ting by the way. So there are choices out there so vote with your wallet and not with comments on a forum AT&T will never read if you are unhappy.
Even if they go this route- AT&T direct service is still expensive. What about the breakup roaming deal with T-Mobile? Do you basically get the AT&T network for free with T-Mobile? T
The scam was, they continued charging exactly the same monthly fee to you, even if they are NOT 'subsidizing' the handset (you bring your own or your handset is 'paid off').
Now what he's essentially saying, based on his "we could have made more money" comment, is that they're going to charge roughly the same (or more) for the same services AND tack the "payments" for the hardware on top?
Basically, pay more for less, and ensure even higher profits for AT&T, the NSA's #1 fan and partner in mobile surveillance in the US?
I was an AT&T customer once. I will never, EVER repeat that mistake. They are the very definition of a nickel-and-dime-you-to-death, rip-off corporation.
Although probably not a lot better, I pay T-Mobile a $60 a month flat fee, and get all the service I need. Unlimited talk and text, 2.5GB of 4G/LTE data, tethering (I've used it with both my iPad and MacBook, and it works great. They just share the data plan basically), no 'hidden/add-on' fees. Data overage throttles to 3G. I haven't gone over yet though.
The connectivity has been pretty solid so far, so I'm sticking with them for now.
i only pay 40 a month tax included with everything unlimited but slower speed after 1GB most ppl on contracts pay 100+.
it good to have gsm phone and a google voice number then u can change monthly until u r satisfied and u know the price is only going down.
I am so glad tmo didnt merge with att more competition is great for consumers.
and now u can get top of the line unlocked phone for only 350 from google. google is forcing the prices lower coz it doesnt depend on sales for its profit i am sure some companies must be pretty mad about that
AT&T is the Microsoft of cell carriers.
Couldn't be happier with T-Mobile.
Now what he's essentially saying, based on his "we could have made more money" comment, is that they're going to charge roughly the same (or more) for the same services AND tack the "payments" for the hardware on top?
Ah, no. Did you see this from another article? "Wireless customers who bring their own device, buy a handset without a subsidy, or have their current contract expire will see their monthly data share bill drop by an average of $15 per month, AT&T announced on Thursday."
They're dropping current prices, then adding a 24-month payment plan on top for subsidized phones.
Obviously the scheme is a win for AT&T, but it's not the total ripoff you make it out to be.
I wish Apple offered their own wireless service. I'd dump AT'n'T in a California minute.
I did. I'd been living abroad the past couple of years, and went with T-mobile when I got back this time around. I bought my own handset from the Apple Store, and signed on to T-mobile's $60 a month tier.
$60. That's the price, that's what I pay. Period. Not like AT&T's so-called $60 a month service, which is just a $60 *base price*, PLUS $3 more for this, and $5 more for that, and oh, $18 more for fees, taxes, and by the time you're done you're actually paying something like $90 for that "$60 tier" (which includes a pathetic amount of data, so you're almost guaranteed to pay overages or upgrade to a more expensive tier). Most people I know are paying $120 to $150 to AT&T for their iPhone service, and not really getting a whole lot more from it than I do for $60 at T-mobile.
I did the math as well. I bought a 64GB iPhone 5s up front for $850. I'll probably use it for 3 years (my previous two iPhones lasted at least that long), and then flip it to a new model. Based on history, I'll get about $200 back for my current handset (5s) on resale. So my actual cost is more like $80 a month factoring in the cost of the handset. ($60 for service + about $20/month for the handset over 3 years). Beats the $120 a month I was paying to AT&T for less service/data previously. A 33% savings!
Despite what Tallest says, it is stupid what Apple charges when you want a phone with more flash memory. There is no way in the sane world Apple can justify its prices, except that they can get away with it. That people still don't have a choice - if they want iPhone, they pay Apple's prices, whether they like it or not.
I have wondered for long, why so many people have a totally unreasonable hatred towards Apple - and I think it is because the company makes extremely desirable products, which you really want to buy, but then sets prices that are very high - carrying huge profit margins. Some people buy the phone still, but there are a lot of people that ultimately don't buy it, because they just can't afford it. A lot of these people are frustrated - because the same appeal and image Apple products have, is denied to them, just because they cannot or will not pay Apple's bloated prices.
It is natural for these Apple to have a hatred towards Apple and to hope for Apple to fail. A lot of people will be thrilled if Apple makes a mistake, and falls flat on its face.
To a large extent, Apple is to blame for this. The prices they set, and the margins they expect are without doubt on the higher side.
It is this bad karma that is accumulating as millions of people who hate Apple, and are just waiting for other technologies to become realistic alternatives. Once Android reaches that place, Apple will struggle - and that's the reason for Apple's aggression in the courts against Android.
AT&T is the Microsoft of cell carriers.
Couldn't be happier with T-Mobile.
I agree. I was with AT&T before and switched to Sprint and also couldn't be happier with the service and especially my bill. Unlimited LTE not to mention unlimited texts and calls for $50 a month is fantastic.