4 ms·

It seems a shame that the backing of a network operator is still required to successfully sell a hardware device in this day and age (especially in the US). It'

It seems a shame that the backing of a network operator is still required to successfully sell a hardware device in this day and age (especially in the US). It's like only being able to buy a Thinkpad if your broadband supplier will sell you one. I look forward to the day when most phones are not tied into contracts, but I think I may be waiting a long time.

mdeslaur 13y ago
It is, but nobody wants to pay $600 for a phone that could cost you $99 when subsidized by your network operator.
snogglethorpe 13y ago
My carrier doesn't subsidize phones, rather they will simply finance your purchase of a phone that you pay back in monthly chunks along with your phone contract (so when your phone is paid off, your monthly bills drop). So even for people that don't want to pay a lump-sum for a phone, you can imagine that it would be possible to just split those two businesses into "carrier" and "phone purchase financer." However, presumably in that case the latter would have to charge higher finance fees than a carrier with integrated financing, because they'd be assuming the risk of financing without the extra profit that comes from the monthly phone contract. So since the integration of the two allows lower fees, and people lovvvvve lower fees, well... the integration of carriers and phone financing isn't very surprising...
rogerbinns 13y ago
Note that implicit in the deal is that the carrier provides support. You can take the phone to the store and ask questions, or call them. For faulty hardware they will replace it (warranty services). The carrier will typically also do insurance for those that want it. The consumer has an ongoing relationship with the carrier. It is hardly surprising phones mostly get bought that way. There is no such relationship with the phone manufacturers or retailers, with the Apple exception, and even they depend on carriers. (You can fairly accurately predict Apple sales by how many carriers carry the devices.) Note that being available on a carrier doesn't automatically lead to success (eg Blackberry and Nokia are available on about 3 times as many carriers as Apple is). However it is a prerequisite for getting a foot in the door.

mdeslaur 13y ago

It is, but nobody wants to pay $600 for a phone that could cost you $99 when subsidized by your network operator.

snogglethorpe 13y ago

My carrier doesn't subsidize phones, rather they will simply finance your purchase of a phone that you pay back in monthly chunks along with your phone contract (so when your phone is paid off, your monthly bills drop). So even for people that don't want to pay a lump-sum for a phone, you can imagine that it would be possible to just split those two businesses into "carrier" and "phone purchase financer." However, presumably in that case the latter would have to charge higher finance fees than a carrier with integrated financing, because they'd be assuming the risk of financing without the extra profit that comes from the monthly phone contract. So since the integration of the two allows lower fees, and people lovvvvve lower fees, well... the integration of carriers and phone financing isn't very surprising...

rogerbinns 13y ago

Note that implicit in the deal is that the carrier provides support. You can take the phone to the store and ask questions, or call them. For faulty hardware they will replace it (warranty services). The carrier will typically also do insurance for those that want it. The consumer has an ongoing relationship with the carrier. It is hardly surprising phones mostly get bought that way. There is no such relationship with the phone manufacturers or retailers, with the Apple exception, and even they depend on carriers. (You can fairly accurately predict Apple sales by how many carriers carry the devices.) Note that being available on a carrier doesn't automatically lead to success (eg Blackberry and Nokia are available on about 3 times as many carriers as Apple is). However it is a prerequisite for getting a foot in the door.