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> What's the difference between giving away a $1200 phone in exchange for a 2-year contract which costs $50 extra per month That phone is generally not given a

> What's the difference between giving away a $1200 phone in exchange for a 2-year contract which costs $50 extra per month That phone is generally not given away - the only phones "given away" are generally low end. $1200 flagship phones come at the cost of a contract on the line AND a monthly payment for the device that pays for it in full.

RHSeeger 2y ago
The last 3 phones I purchased, it was a choice between - plan + buying new phone + no contract - plan + phone "free with plan" + increase in plan cost because of phone + 2 year contract For one pone, the first was a clear winner. For another, it was slightly cheaper to get it with the plan (2nd option). For the last (iphone) it was the second option, but there was no increase in plan because of it. So, the "cost" of the phone can vary a lot, and taking the time to figure it out is well worth it.
ImPostingOnHN 2y ago
If the monthly payment pays for the device in full, what's the problem with a customer ending the service contract while continuing the monthly payments? If the monthly payment doesn't pay for it in full, why not just make the monthly device payments $n more, and the cellular service payments $n less? That way you don't need to worry if the service plan is cancelled, because the device payments would still be due (or a lump sum payment would be due).
- grahamj 2y ago
  Because they don't make much on the device payments, as opposed to the bloated plan fees.
- OkGoDoIt 2y ago
  You’re thinking about it from a consumer point of view. From the carrier point of view, they don’t want it to be easy for you to decide to switch to another carrier (They want their service to have a high switching cost). So they have various roadblocks like this, to make it a bit more frustrating to switch carriers. Of course they can’t make it too difficult where they would face legal pushback, so there’s a lot of stuff like this that feels random or suboptimal from a technical point of view but helps their bottom line in aggregate. Remember back when text messages or phone calls were free as long as you messaged/called someone on the same carrier? That wasn’t about passing on savings of actual interchange fees, it was about incentivizing you to be loyal to your carrier and get your friends on board as well.
  - deleted 2y ago
    [deleted]

RHSeeger 2y ago

The last 3 phones I purchased, it was a choice between - plan + buying new phone + no contract - plan + phone "free with plan" + increase in plan cost because of phone + 2 year contract For one pone, the first was a clear winner. For another, it was slightly cheaper to get it with the plan (2nd option). For the last (iphone) it was the second option, but there was no increase in plan because of it. So, the "cost" of the phone can vary a lot, and taking the time to figure it out is well worth it.

ImPostingOnHN 2y ago

If the monthly payment pays for the device in full, what's the problem with a customer ending the service contract while continuing the monthly payments? If the monthly payment doesn't pay for it in full, why not just make the monthly device payments $n more, and the cellular service payments $n less? That way you don't need to worry if the service plan is cancelled, because the device payments would still be due (or a lump sum payment would be due).

grahamj 2y ago
Because they don't make much on the device payments, as opposed to the bloated plan fees.
OkGoDoIt 2y ago
You’re thinking about it from a consumer point of view. From the carrier point of view, they don’t want it to be easy for you to decide to switch to another carrier (They want their service to have a high switching cost). So they have various roadblocks like this, to make it a bit more frustrating to switch carriers. Of course they can’t make it too difficult where they would face legal pushback, so there’s a lot of stuff like this that feels random or suboptimal from a technical point of view but helps their bottom line in aggregate. Remember back when text messages or phone calls were free as long as you messaged/called someone on the same carrier? That wasn’t about passing on savings of actual interchange fees, it was about incentivizing you to be loyal to your carrier and get your friends on board as well.
- deleted 2y ago
  [deleted]