6 ms·

I've never understood why people buy phones from the carriers rather than from a retail store or online and insert the SIM (for GSM carriers).

by u801e 9y ago

JoshTriplett 9y ago
Cost. Many people can't afford hundreds of dollars all at once for a phone, but can afford to subsidize it through a contract.
- BoorishBears 9y ago
  The subsidy days are (mostly) gone. Now they pay the full MSRP, but financed at 0% interest for 2 years. In fact, they pay more than MSRP if you consider the fact you're forced to attach a phone plan which costs more than the equivalent plan from an MVNO using the same network.
  - coralreef 9y ago
    The time value of money is still a subsidy. The average American consumer has stacks of debt (credit card, student loan, etc) which makes fronting $1k for a phone more difficult.
    - BoorishBears 9y ago
      If you can’t afford 1k for a phone you shouldn’t finance it. We’re not talking about a house or a car, it’s a 1,000$ phone that can have 90% of it's features replicated by a phone that cost as much as the down payment on the 1k phone that someone with maxed out credit will have to pay.
      - coralreef 9y ago
        The people buying the phones usually already know this. Consumers gonna consume.
- u801e 9y ago
  Yes, but this seems to be unique to the US market. In countries where people don't earn as much, getting a subsidized phone via the carrier doesn't seem to be the case.
JeanSebTr 9y ago
In my case, it's an economic reason. The monthly discount that Canadian carriers offer for bringing your own phone is generally lower than the value of the phone. So why would I pay upfront if the model I want is available from the carrier?
- robotresearcher 9y ago
  All the Canadian carriers are such assholes I can't bring myself to sign a long term contract with them. It's also nice to have an unlocked retail phone. Much cheaper to get a SIM from a vending machine at the airport anywhere outside North America than to suffer Canadian carriers' insane roaming charges.
  - JeanSebTr 9y ago
    Since December 1, 2017, they can't be sold locked and phone bought before that can be unlocked for free.
    - robotresearcher 9y ago
      That's good news!
Chaebixi 9y ago
> I've never understood why people buy phones from the carriers rather than from a retail store or online and insert the SIM (for GSM carriers). Cultural momentum. In the US, phones used to be heavily subsidized by carriers via contracts. Even if you brought your own phone, and don't think the carriers gave you a big enough discount to make it economically justifiable, so the practice of buying "unlocked" phones never took off and was more of a niche thing. That's all changed recently, with the death of long-term contracts, but old habits die hard.
- aidenn0 9y ago
  Verizon also used to not allow unlocked phones on their network. If the phone was not Verizon branded you were forbidden from using it. I'm not sure if that's still the case.
  - untog 9y ago
    That was also complicated by Verizon using a CDMA network - most third party phones are GSM and wouldn't work on their network. Luckily LTE means we're seeing the back of all this, though I think you still need a CDMA phone for areas that do not yet have LTE.
  - sbalea 9y ago
    No longer the case. However, they only allow devices that are certified to work on their network, and that means support for legacy CDMA. But if your phone is unlocked and it has the necessary bits, you can certainly bring it in. Also, all smartphones they currently sell are unlocked, as part of a deal with the FCC when they won the rights to some 700Mhz band
oh_sigh 9y ago
Same reason people buy a house with a mortgage and not straight cash.
- u801e 9y ago
  Most people will get a mortgage to buy a house. Most people aren't going to get a loan to make a $300 to $500 purchase.
  - mcphage 9y ago
    > Most people aren't going to get a loan to make a $300 to $500 purchase. At 0% interest, why wouldn't you?
    - u801e 9y ago
      Depending on what credit card one uses for the purchase, one could get anywhere from 1.5% to 5% cash back (assuming they pay the balance in full before the credit card statement due date).
      - sokoloff 9y ago
        I pay my cell phone bill with a credit card anyway, so I still get the points, independent of how I bought the device. (I also use Ting and have bought the phones outright, but even previously on Sprint and AT&T with subsidized phones, I still got the points every month in addition to the device subsidy.)
    - philsnow 9y ago
      A 2 year loan for $500 is 24 chances for me to forget to make a payment, for a glitch to cause my bank / cc to not pay them on time, for them to somehow not notice that I have paid them when I actually did, etc etc etc, any of which will either result in me eating some costs (completely eliminating the benefit of the 0% loan) or burning 1-10 hours on the phone with some clowns. What am I losing, whatever I would have made by investing that $500 over the same time period ? We're talking less than $50. I'm very lucky to be at a point in my life where I'd gladly give away "$50, 2 years from now" in exchange for "don't have to think about it, ever again".
ryguytilidie 9y ago
You don't understand why people would pick a small monthly fee over a four figure purchase price for a phone? Because very few people have the savings or extra money to do so.
- evanlivingston 9y ago
  4 figures? What phones are people buying? I bought my Huawei honor 8 for 300 and I pay 50 a month for a plan.
- u801e 9y ago
  > four figure purchase price for a phone? There are phones that are quite a bit cheaper than that.
untog 9y ago
Because the carrier's don't/didn't offer any discount for bringing your own device. If they're effectively offering you a 0% loan over two years to pay off a phone it's not the craziest thing to take them up on that offer. Plus, if it breaks you can just take it to your nearest store. A lot more convenient than mailing it somewhere.
- greenhouse_gas 9y ago
  I haven't seen a "free phone" in a _long_ time (two years or so). Now it's "pay X dollars a month 24 months".
  - untog 9y ago
    Right. Which, if it adds up correctly, is basically a 0% loan for the price of the phone.
    - votepaunchy 9y ago
      Unless you pick up a $100/$200/$300 rebate for buying through your carrier.
- rconti 9y ago
  My ATT plan has BYOD so I save $15 per line over 2 years (=$360) to not have to worry about arguing with a carrier over whether I can unlock MY device. Surprise, it's about the cost of the 'subsidy'. Back when they had subsidies, that is, I think now you just lease to own. All I know is, I'm not getting anything for free with their garbage so I'll just by my own. If my phone costs $1000, I damn well want to know what it's costing me and consciously make that decision, not have it hidden in a payment.

I've never understood why people buy phones from the carriers rather than from a retail store or online and insert the SIM (for GSM carriers).

by u801e 9y ago

I've never understood why people buy phones from the carriers rather than from a retail store or online and insert the SIM (for GSM carriers).

JoshTriplett 9y ago

Cost. Many people can't afford hundreds of dollars all at once for a phone, but can afford to subsidize it through a contract.

BoorishBears 9y ago
The subsidy days are (mostly) gone. Now they pay the full MSRP, but financed at 0% interest for 2 years. In fact, they pay more than MSRP if you consider the fact you're forced to attach a phone plan which costs more than the equivalent plan from an MVNO using the same network.
- coralreef 9y ago
  The time value of money is still a subsidy. The average American consumer has stacks of debt (credit card, student loan, etc) which makes fronting $1k for a phone more difficult.
  - BoorishBears 9y ago
    If you can’t afford 1k for a phone you shouldn’t finance it. We’re not talking about a house or a car, it’s a 1,000$ phone that can have 90% of it's features replicated by a phone that cost as much as the down payment on the 1k phone that someone with maxed out credit will have to pay.
    - coralreef 9y ago
      The people buying the phones usually already know this. Consumers gonna consume.
u801e 9y ago
Yes, but this seems to be unique to the US market. In countries where people don't earn as much, getting a subsidized phone via the carrier doesn't seem to be the case.

JeanSebTr 9y ago

In my case, it's an economic reason. The monthly discount that Canadian carriers offer for bringing your own phone is generally lower than the value of the phone. So why would I pay upfront if the model I want is available from the carrier?

robotresearcher 9y ago
All the Canadian carriers are such assholes I can't bring myself to sign a long term contract with them. It's also nice to have an unlocked retail phone. Much cheaper to get a SIM from a vending machine at the airport anywhere outside North America than to suffer Canadian carriers' insane roaming charges.
- JeanSebTr 9y ago
  Since December 1, 2017, they can't be sold locked and phone bought before that can be unlocked for free.
  - robotresearcher 9y ago
    That's good news!

Chaebixi 9y ago

> I've never understood why people buy phones from the carriers rather than from a retail store or online and insert the SIM (for GSM carriers). Cultural momentum. In the US, phones used to be heavily subsidized by carriers via contracts. Even if you brought your own phone, and don't think the carriers gave you a big enough discount to make it economically justifiable, so the practice of buying "unlocked" phones never took off and was more of a niche thing. That's all changed recently, with the death of long-term contracts, but old habits die hard.

aidenn0 9y ago
Verizon also used to not allow unlocked phones on their network. If the phone was not Verizon branded you were forbidden from using it. I'm not sure if that's still the case.
- untog 9y ago
  That was also complicated by Verizon using a CDMA network - most third party phones are GSM and wouldn't work on their network. Luckily LTE means we're seeing the back of all this, though I think you still need a CDMA phone for areas that do not yet have LTE.
- sbalea 9y ago
  No longer the case. However, they only allow devices that are certified to work on their network, and that means support for legacy CDMA. But if your phone is unlocked and it has the necessary bits, you can certainly bring it in. Also, all smartphones they currently sell are unlocked, as part of a deal with the FCC when they won the rights to some 700Mhz band

oh_sigh 9y ago

Same reason people buy a house with a mortgage and not straight cash.

u801e 9y ago
Most people will get a mortgage to buy a house. Most people aren't going to get a loan to make a $300 to $500 purchase.
- mcphage 9y ago
  > Most people aren't going to get a loan to make a $300 to $500 purchase. At 0% interest, why wouldn't you?
  - u801e 9y ago
    Depending on what credit card one uses for the purchase, one could get anywhere from 1.5% to 5% cash back (assuming they pay the balance in full before the credit card statement due date).
    - sokoloff 9y ago
      I pay my cell phone bill with a credit card anyway, so I still get the points, independent of how I bought the device. (I also use Ting and have bought the phones outright, but even previously on Sprint and AT&T with subsidized phones, I still got the points every month in addition to the device subsidy.)
  - philsnow 9y ago
    A 2 year loan for $500 is 24 chances for me to forget to make a payment, for a glitch to cause my bank / cc to not pay them on time, for them to somehow not notice that I have paid them when I actually did, etc etc etc, any of which will either result in me eating some costs (completely eliminating the benefit of the 0% loan) or burning 1-10 hours on the phone with some clowns. What am I losing, whatever I would have made by investing that $500 over the same time period ? We're talking less than $50. I'm very lucky to be at a point in my life where I'd gladly give away "$50, 2 years from now" in exchange for "don't have to think about it, ever again".

ryguytilidie 9y ago

You don't understand why people would pick a small monthly fee over a four figure purchase price for a phone? Because very few people have the savings or extra money to do so.

evanlivingston 9y ago
4 figures? What phones are people buying? I bought my Huawei honor 8 for 300 and I pay 50 a month for a plan.
u801e 9y ago
> four figure purchase price for a phone? There are phones that are quite a bit cheaper than that.

untog 9y ago

Because the carrier's don't/didn't offer any discount for bringing your own device. If they're effectively offering you a 0% loan over two years to pay off a phone it's not the craziest thing to take them up on that offer. Plus, if it breaks you can just take it to your nearest store. A lot more convenient than mailing it somewhere.

greenhouse_gas 9y ago
I haven't seen a "free phone" in a _long_ time (two years or so). Now it's "pay X dollars a month 24 months".
- untog 9y ago
  Right. Which, if it adds up correctly, is basically a 0% loan for the price of the phone.
  - votepaunchy 9y ago
    Unless you pick up a $100/$200/$300 rebate for buying through your carrier.
rconti 9y ago
My ATT plan has BYOD so I save $15 per line over 2 years (=$360) to not have to worry about arguing with a carrier over whether I can unlock MY device. Surprise, it's about the cost of the 'subsidy'. Back when they had subsidies, that is, I think now you just lease to own. All I know is, I'm not getting anything for free with their garbage so I'll just by my own. If my phone costs $1000, I damn well want to know what it's costing me and consciously make that decision, not have it hidden in a payment.