You walk into Verizon and the first synapse that fires in someone's head is, "How can I renew their contract or get them into a completely new one for even more commission?"
See most people don't realize that salespeople don't make money from selling phones- it comes
from contract renewals (upgrades) and new, 2 year commitments for service. Quickly I'll say that T-Mobile by far is the most forward thinking and helpful regarding contracts and phone subsidy, as T-Mobile tends to be far ahead of the pack in terms of brilliance across all fronts- "Wifi-Calling," having AT&T's network while the opposite is not true, no contract plans if you provide your own device, etc."
The reason they don't need you to commit to them for 2 years is because their rates are cheap as dirt, and in my case- they're the ONLY carrier with 4G service, meaning speeds 10 to 15 times faster than even Verizon's
Long Term Evolution Network. Yes, LTE should be TFN-
The Forever Network. One day they'll have 4G here... one day- you'll see... But salesmen will convince you that even though you're paying twice as much for slower service, their very slow service is quite ubiquitous. They have towers in so dang many places, that it's near impossible to get away from the forever network. T-Mobile wasn't going to be that- they pay AT&T each month to use their towers along with the ones they have already.
This brings to mind what will follow (that the iPhone is God) as I sit and wonder why people have to have a slower phone (iPhones are 3G phones and wouldn't do 4G even if the forever network ever got it here.) They cost twice as much and perform about 1/4th of the functions of an open sourced Android phone. And mostover, they can struggle at times with what apps they DO have, because the iPhone isn't a dual core device either! Their 8 year old technology that's overpriced, yet looks beautifully crafted, is simply like buying a Rolls Royce instead of a VW Passat and a European Vacation or two- and a couple months worth of cell service.
Mark my words, in five years less than 50% of the US will be renewing contracts just to get a percieved discount on a new device. I used to have customers come in and sign 2 years to get a $50 phone that you could get new on ebay for $45- and have NO contract. You could hook that phone up with Page Plus (initially Verizon's Pre-paid department that didn't work out, but still has complete network access at 3G/ 4G speeds). Then that $45 slider phone would be unlimited at $39.99 per month, meaning you would be saving around $600 per year- $1,200 per contract term by paying $5 LESS for the same phone from anyone but Verizon. An LG is an LG- Samsungs are Samsungs...---(My figures assume an unlimited, one line plan for the same device over 24 months with Verizon as opposed to Page Plus (http://homePCmedia.com) I am a Page plus dealer, though I don't do much with it- you can ask me questions if you'd like, but they don't pay me anything to get you to sign up for their service- they can't afford to... I have Page Plus for my Droid X2 and most of my close friends save $30 - $100 a month by using Page Plus now, but I don't fly the flag outside of my office on 127.
The
iPhone
is hitting the prepaid market in a big way with Cricket and Virgin
Mobile offering Apple's marquee device. But can anyone afford it?
The key dilemma for a prepaid
iPhone
is exactly what makes the market so strong: the lack of a service
contract. Consumers love the ability to jump in and out of a service,
but that freedom comes at a price in the form of a higher upfront cost
for the phone.
For the iPhone, that's a particularly tough pill to swallow. Cricket, owned by Leap Wireless, is
charging $500 and $400 for the iPhone 4S and iPhone 4, respectively. Virgin Mobile isn't even bothering to give any discounts,
offering the two models for $649 and $549.
Now, for anyone willing to pay for a prepaid iPhone, the savings are
tremendous. At Virgin Mobile, where the cheapest plan is $30 a month,
the total cost over two years would be $1,369. At Leap, it's $1,868.99
(its plan offers unlimited calling). In comparison, AT&T and
Verizon's closest comparable plans would cost $2,359.75 over the life of
the service contract (they both offer slightly more minutes than
Virgin).
So if you're not much of a talker, the Virgin plan is a nice bargain.
Still, the cost of the phone will still be a barrier of entry to many in
the prepaid world. Most prepaid customers typically fall into lower
income brackets, suffer from credit issues, or both. An expensive iPhone
probably isn't the wisest purchase to make for many of these customers.
"The $399 and $499 price points have historically been nearly irrelevant
in the prepaid landscape," J.P. Morgan analyst Philip Cusick said in a
note issued last week. "Customers will need to come up with the full
price on the day of sale. This is not something that traditional prepaid
customers can usually do."
Prepaid executives have said in the past that their customers have been
increasingly willing to pay more for phones, particularly flashier
Android devices. Some are willing to forgo other necessities for a flashier mobile device.
The prepaid carriers like it because it creates a bit of buzz to draw in
customers. Given the price tag, it would likely keep customers locked
in despite the lack of a contract. No one is going to give up the
service after shelling out $500 for a phone.
Still, the iPhone is pricier than anything else in the prepaid world.
The most expensive phone in Virgin's current lineup is the HTC Evo V 4G,
a rebranded version of last year's Evo 3D that costs $299.99. At Leap,
the most expensive phone is the Samsung Vitality for $199.99, which is
discounted by another $100 if ordered online.
You get what you pay for with Virgin's plans. Despite being a unit of
Sprint, it doesn't get the same access to unlimited data. Customers get
2.5GB of data before Virgin throttles, or slows down, the wireless
connection.
While most of the other carriers have had the
iPhone 4S
for a few months, the prepaid players are just getting the iPhone now.
Presumably, this will be the first time that prepaid customers will have
access to the iPhone. But why buy one now when the next iPhone is right
around the corner? It may be better to wait a few months to see what
options are available.
Fortunately for iPhone users, there's a healthy resale market. A used
iPhone 4S fetches for $389.48, while a used iPhone 4 sells for $245,
according to listings found on eBay.
So if you can stomach the large upfront cost, there are some excellent
benefits down the line. But shelling out as much as $649 would make
anyone -- prepaid or in a contract -- reconsider whether an iPhone is
really worth it.
And if you are STUCK on an iPhone and have a better reason than- my mom and sister both have one, then do me a huge favor- GET AN IPHONE! They are made for people just like you. But don't waste your money on the 4S that talks to you (Androids have been doing so for about 7 years now), because the technology in those iThings has been the same for about 4 years. When they release a dual core phone, with a 4G chipset- go get you one. But you might have to do a contract to subsidize that one- My guess is $945 brand new, retail price and all over the Internet too... If you find one for much less, don't buy it......
But all technology, my friends, is going open sourced (Android, Linux, Ubuntu, .....) Microsoft and Apple are in real trouble when people can make software that does the same thing as the version selling for $400, $600, $1,800... And because ANYONE can contribute, it's going to grow faster than companies that have to pay their employees to work for them....
REDUCE, REUSE.... Waste not, Want not.... And when you do get a new phone, drop you old one off here to be refurbished and given to the battered women's shelter and to military programs.....
 |
| Bridge to the Never Ending 2yr Agreement |
Mark Vanderbloemen, CEO
Vanderbloemen Comunications, Inc
Hickory, NC
828-212-4817
dba: Viewmont Computer Recycling
dba Home PC Media (Home automation for decreasing energy consumption, entertainment and connectivity, security camera installation and other things George Jetson invented. )
http://homePCmedia.com
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