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I really hope transparent pricing takes off in mobile. When consumers see the true cost of the device they are buying, manufacturers are going to have to compet

I really hope transparent pricing takes off in mobile. When consumers see the true cost of the device they are buying, manufacturers are going to have to compete on price. Which is awesome. I think what T-Mobile is doing here is pretty brillant. Their biggest obstacle is that consumers don't care if the iPhone really costs $600 when all they see is the $199. But they've managed to find a way that makes the upfront costs significantly lower at only a slight bump to their monthly rates. I think this has a chance of working, but I worry that T-Mobile doesn't have the muscle to push other carriers into doing something similar.

potatolicious 14y ago
I think T-Mo will be fine - they are still offering subsidization for customers who want it, and it's no more expensive than the competition.
jcastro 14y ago
It's hard to break the mental model of subsidies. As an example: Last month my wife dropped her old phone and it broke, and I got her a Nexus 4 for $299 and we signed up for simplemobile (which is a Tmobile MVNO) for about $90 a month for the both of us. Our previous bill from Tmo was $130 a month, a full $40 more AND on contract. Since it took a few days to wait for the Nexus she was asking "Why don't we just go to the store and get the free phones instead? Why spend all this money on a fancy phone?" I'm glad tmo is doing this, but I think they will need to market it in such a way that it is obvious to consumers that they will save money in the long run.
- enjo 14y ago
  Nexus 4 + t-mobile off contract is just fantastic. I knocked $50/month off of my monthly bill from Verizon (and got more in return). The thing pays for itself in 6 months.
  - ISL 14y ago
    I now pay less for voice+data with Ting than I did for voice+text, with an employer discount, on Verizon. Furthermore, the phone (refurb Optimus S) is so inexpensive, I don't have to worry about destroying it. Sensible pricing is starting to win.
- ttrreeww 14y ago
  Did you explain to her the $40 a month difference? And did she get's it?
- superuser2 14y ago
  Until MVNOs allow roaming, the idea that they are an acceptable substitute for real cellular coverage is dangerous and we need to stop spreading it. There are ENTIRE STATES and some major cities where networks like SimpleMobile have zero coverage. Green Bay, WI, for example, is big enough for an NFL team, but if you find yourself there with a SimpleMobile phone, it will be a brick. Be prepared for the fact that you cannot call roadside assistance on a cross-country road trip, from a suburb that's too far away from town, or from some minor population centers. Forget small towns (I have some extended family in fairly remote areas). If you stay in San Francisco at all times, I'm sure SimpleMobile is great, but it would not be a very good idea to do this in the Midwest. Maybe if there was still a cost savings when you factored in an emergency dumbphone on a strong network like Verizon.
  - bsimpson 14y ago
    I use StraightTalk, and I'm pretty sure they use both AT&T and T-Mobile. If you have coverage on either of those (at the very least, on AT&T), I should have coverage as well.
  - tanzam75 14y ago
    Why pay an extra $480 a year for emergency service, when you can get it for $30 a year? $30 is what PagePlus will charge you in a year of prepaid service, using the per-minute pay-as-you-go plan. You get access to the entire Verizon network at 10 cents per minute, plus roaming access at 29 cents per minute. In fact, this is even better for emergencies than postpaid service. Now you have access to both the GSM and CDMA 2G networks.
- zmonkeyz 14y ago
  Agreed. I was pretty resistent to the new pricing when the rep was explaining it to me because i just knew there had to be some fine print. Needless to say i'm very happy with the plan change and i'm paying much less than i was. I did have to pay a little more up front for the phone but it was worth it.
joelrunyon 14y ago
So an iPhone is $600, but I can buy an iPad for $320? That alone is pretty impressive job Apple/AT&T/Verizon have done on positioning & playing to people's psychology.
- thedrbrian 14y ago
  That iPad is a generation behind in processor and only has a 1024x768 pixel screen.
  - Samuel_Michon 14y ago
    Not to mention it has no phone or 3G data connectivity, way worse cameras, and no GPS. Apple also sells unlocked and contract-free iPhones, starting at $450 for the iPhone 4.
    - adrr 14y ago
      Exactly. Licensing costs for technology involving mobile phone and mobile communication adds lot of expense. Fair comparison is with the IPads with mobile data but that still lacks the licensing for mobile voice.
    - barredo 14y ago
      You, and the parent comment are right. But the main difference in cost between a smartphone and a tablet is miniaturization of hardware.
      - Samuel_Michon 14y ago
        Not really. iPad and iPhone have the same chips. iPad retina screens are actually more expensive than iPhone retina screens because they're bigger (they're the same panels, just cut to a different size). The same is true for iPad batteries: they're larger than iPhone batteries and hold way more energy. I couldn't find Bill-of-Materials cost analysis for the latest models, but let's compare the iPad 3 Wifi+4G with the iPhone 4S: iPad screen: $127, iPhone screen: $37 iPad battery: $32, iPhone battery: $6 http://www.isuppli.com/Teardowns/News/pages/New-iPad-32-GB-4G-Carries-364-35-Bill-of-Materials.aspx http://www.isuppli.com/Teardowns/News/pages/New-iPad-32-GB-4... http://www.isuppli.com/Teardowns/News/Pages/iPhone-4S-Carries-BOM-of-$188,-IHS-iSuppli-Teardown-Analysis-Reveals.aspx http://www.isuppli.com/Teardowns/News/Pages/iPhone-4S-Carrie...

potatolicious 14y ago

I think T-Mo will be fine - they are still offering subsidization for customers who want it, and it's no more expensive than the competition.

jcastro 14y ago

It's hard to break the mental model of subsidies. As an example: Last month my wife dropped her old phone and it broke, and I got her a Nexus 4 for $299 and we signed up for simplemobile (which is a Tmobile MVNO) for about $90 a month for the both of us. Our previous bill from Tmo was $130 a month, a full $40 more AND on contract. Since it took a few days to wait for the Nexus she was asking "Why don't we just go to the store and get the free phones instead? Why spend all this money on a fancy phone?" I'm glad tmo is doing this, but I think they will need to market it in such a way that it is obvious to consumers that they will save money in the long run.

enjo 14y ago
Nexus 4 + t-mobile off contract is just fantastic. I knocked $50/month off of my monthly bill from Verizon (and got more in return). The thing pays for itself in 6 months.
- ISL 14y ago
  I now pay less for voice+data with Ting than I did for voice+text, with an employer discount, on Verizon. Furthermore, the phone (refurb Optimus S) is so inexpensive, I don't have to worry about destroying it. Sensible pricing is starting to win.
ttrreeww 14y ago
Did you explain to her the $40 a month difference? And did she get's it?
superuser2 14y ago
Until MVNOs allow roaming, the idea that they are an acceptable substitute for real cellular coverage is dangerous and we need to stop spreading it. There are ENTIRE STATES and some major cities where networks like SimpleMobile have zero coverage. Green Bay, WI, for example, is big enough for an NFL team, but if you find yourself there with a SimpleMobile phone, it will be a brick. Be prepared for the fact that you cannot call roadside assistance on a cross-country road trip, from a suburb that's too far away from town, or from some minor population centers. Forget small towns (I have some extended family in fairly remote areas). If you stay in San Francisco at all times, I'm sure SimpleMobile is great, but it would not be a very good idea to do this in the Midwest. Maybe if there was still a cost savings when you factored in an emergency dumbphone on a strong network like Verizon.
- bsimpson 14y ago
  I use StraightTalk, and I'm pretty sure they use both AT&T and T-Mobile. If you have coverage on either of those (at the very least, on AT&T), I should have coverage as well.
- tanzam75 14y ago
  Why pay an extra $480 a year for emergency service, when you can get it for $30 a year? $30 is what PagePlus will charge you in a year of prepaid service, using the per-minute pay-as-you-go plan. You get access to the entire Verizon network at 10 cents per minute, plus roaming access at 29 cents per minute. In fact, this is even better for emergencies than postpaid service. Now you have access to both the GSM and CDMA 2G networks.
zmonkeyz 14y ago
Agreed. I was pretty resistent to the new pricing when the rep was explaining it to me because i just knew there had to be some fine print. Needless to say i'm very happy with the plan change and i'm paying much less than i was. I did have to pay a little more up front for the phone but it was worth it.

joelrunyon 14y ago

So an iPhone is $600, but I can buy an iPad for $320? That alone is pretty impressive job Apple/AT&T/Verizon have done on positioning & playing to people's psychology.

thedrbrian 14y ago
That iPad is a generation behind in processor and only has a 1024x768 pixel screen.
- Samuel_Michon 14y ago
  Not to mention it has no phone or 3G data connectivity, way worse cameras, and no GPS. Apple also sells unlocked and contract-free iPhones, starting at $450 for the iPhone 4.
  - adrr 14y ago
    Exactly. Licensing costs for technology involving mobile phone and mobile communication adds lot of expense. Fair comparison is with the IPads with mobile data but that still lacks the licensing for mobile voice.
  - barredo 14y ago
    You, and the parent comment are right. But the main difference in cost between a smartphone and a tablet is miniaturization of hardware.
    - Samuel_Michon 14y ago
      Not really. iPad and iPhone have the same chips. iPad retina screens are actually more expensive than iPhone retina screens because they're bigger (they're the same panels, just cut to a different size). The same is true for iPad batteries: they're larger than iPhone batteries and hold way more energy. I couldn't find Bill-of-Materials cost analysis for the latest models, but let's compare the iPad 3 Wifi+4G with the iPhone 4S: iPad screen: $127, iPhone screen: $37 iPad battery: $32, iPhone battery: $6 http://www.isuppli.com/Teardowns/News/pages/New-iPad-32-GB-4G-Carries-364-35-Bill-of-Materials.aspx http://www.isuppli.com/Teardowns/News/pages/New-iPad-32-GB-4... http://www.isuppli.com/Teardowns/News/Pages/iPhone-4S-Carries-BOM-of-$188,-IHS-iSuppli-Teardown-Analysis-Reveals.aspx http://www.isuppli.com/Teardowns/News/Pages/iPhone-4S-Carrie...