I understand that. I was just saying that if Verizon Wireless and Verizon regular are separate then if ones losing money the other isn't necessarily. One has no affect on the others bottom line.
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[Updated] Verizon Plans To Eliminate 'Grandfathered' 3G Unlimited Data Plans
- Thread starter dgstorm
- Start date
I understand that. I was just saying that if Verizon Wireless and Verizon regular are separate then if ones losing money the other isn't necessarily. One has no affect on the others bottom line.
What I find quite interesting is that everyone gets so upset about having to pay for tiered data, or having to pay a $30 "upgrade" fee - but no one is concerned about the HUGE amount we pay each month for "hardware subsidy" - whether or not there's anything being subsidized.
It's no secret that when you sign a new 2 year agreement you can get a phone for a "subsidized" price which is several hundred dollars less than if you were to buy that same phone outright. We all then pay an extra amount each month (at least $10 - $15 per month, maybe more?) to offset that initial discount. We all know they're not actually GIVING us a $300 discount on that phone - Verizon is just loaning us the money up front, then we pay it back each month.
But after our 20 month "subsidy" period is over (and especially after our 24 month contract is up) does our monthly service go down by $15/month? Why not? Or if I buy a phone somewhere else at retail and activate it with Verizon, why do I still have to pay a monthly hardware "subsidy"? Isn't Verizon making tons of extra money on all those people who are out of contract or who bought their phones outright?
Verizon gives you two choices:
1) lock yourself in to our services for another 2 years and we'll loan you money to buy a new phone. or,
2) decide you don't want to be locked in, don't buy a new phone, and let Verizon make a HUGE profit margin on your monthly service.
Verizon (and just about every other major carrier) win no matter which you choose.
I just don't understand why people don't get more upset about THAT.
It's no secret that when you sign a new 2 year agreement you can get a phone for a "subsidized" price which is several hundred dollars less than if you were to buy that same phone outright. We all then pay an extra amount each month (at least $10 - $15 per month, maybe more?) to offset that initial discount. We all know they're not actually GIVING us a $300 discount on that phone - Verizon is just loaning us the money up front, then we pay it back each month.
But after our 20 month "subsidy" period is over (and especially after our 24 month contract is up) does our monthly service go down by $15/month? Why not? Or if I buy a phone somewhere else at retail and activate it with Verizon, why do I still have to pay a monthly hardware "subsidy"? Isn't Verizon making tons of extra money on all those people who are out of contract or who bought their phones outright?
Verizon gives you two choices:
1) lock yourself in to our services for another 2 years and we'll loan you money to buy a new phone. or,
2) decide you don't want to be locked in, don't buy a new phone, and let Verizon make a HUGE profit margin on your monthly service.
Verizon (and just about every other major carrier) win no matter which you choose.
I just don't understand why people don't get more upset about THAT.
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The only potential flaw I see in this (and I stress potential, but I actually have no clue, am only going off of what I have always assumed) is where you say:
Because, to be honest, no, I don't know if they are just giving us the discount or not... and they prefer it that way. I attribute this to an even bigger issue I have which is from basic economic theory.... supply and demand. Demand is something we can all get a good idea for by looking at their public records, subscription rates and general user data... but supply on the other - I don't think anyone outside of decision makers and engineers with Verizon knows what their "supply" of network capacity stands. Basic S&D says that when supply drops and/or demand increases, the price of product will increase in a free market. If they have direct control over who much supply they have (or how much they lead us to believe they have) does that really make this a free market structure? So to come full circle, without knowing how taxed their network is and what is driving the cost of the service I am receiving, there is no way to determine how much of a profit they are turning on my month-to-month bill. If it costs them 95% of what I pay to provide me with service as it is, then I could see it completely justifiable that a "guaranteed customer" for two more years in a very fluid market as enough of a payout for subsiding my equipment. If on the other hand they are pulling a 50% profit margin from me, and half of bill is to pay of my device, then I agree with you - that isn't right and needs to change. The problem is we (at least I) just don't know.
monkey_man
Member
It is Business 101 / Marketing gimmick that "in order to make money you have spend money". It is no brainer that they rather give customers subsidized phones (I'm sure they worked out some kinks with phones manufactures to share the loss of subsidized phone), for they can soon sink in $2000 in yearly contract times 2 with some "fines and ability to take anyone to court when they are unable to fulfill their contract." That is the whole point of contracts really, to get you to faithfully pay them on time. That is Great Business when they could find some customers like me who never pay late for decades. At first, I don't mind whatever he said as it will only affect those with 3G to 4G only. I already have 4G phone, so I thought it wouldn't affect me. But what can you do when a company are going rampant about making profits? Sadly tho, Verizon change their stance by vaguely saying that you can only keep unlimited if you get full retail phone. It didn't mention about affecting 3G phone users only this time. It's not just about money personally, for I wouldn't choose Verizon when first thing on my mind is money. I am always looking for value and not getting nickel n dimed for every chance they get. It is just weird to me about the way our leaders speak about no censorships etc. Are they backtracking from it? By saying at the back of their minds, "Hell, we talked to soon about Internet censorships... now we sounded unconstitutional when we will bring censorships to US internet users to take care of MPAA/RIAA fiasco. How can we find the solution then? Oh yeah, let's limit they data users can use. Wow, that's sounded brilliant!" :blink::icon_eek: I agree with other users here that the one of the problems is about users changing their internet course by using their phone as modem. 4G Lte in some locations really is faster than most standard home internet in market. Verizon are known for their networks anyways... I decided to get into smartphones recently as I can use it more instead of carrying laptop wherever I go. I don't know if anyone brought this up. Recent Netflix update only allows users to watch videos via Wi-Fi only. This may sound cliche but when there is no "good faith" in relationship, then all there is to it is about one screwing the other.
monkey_man
Member
Hottttt Diggittyyy D**N! :hail:
The whole idea behind an HTC Rezound being $600 actual price is ridiculous. The entire "subsidized phone" spiel is pure marketing crap.
What did that one site say the cost of iPhone parts was? Like $140? And the retail price is $600?
What I just don't get is that in pretty much every pother arena ion Tech prices go down. Things get cheaper as technology advances.
Not so in the wireless world. You want us to be loyal customers... consume, human, consume.... but then try to limit what we can consume.
I just don't get it.
To Tatdroid's point, honestly I just don't quite get it.
Where is this extra price? Why is it that if I pay full price I still pay the same as you every month.
It's not like it's LISTED ON THE BILL. That's why people aren't upset about that.
You sign up for a plan it is: xx.00 for a minutes plan + xx.00 for data + xx.00 for any extras.
Doesn't matter if you purchase it outright or subsidized.
What did that one site say the cost of iPhone parts was? Like $140? And the retail price is $600?
What I just don't get is that in pretty much every pother arena ion Tech prices go down. Things get cheaper as technology advances.
Not so in the wireless world. You want us to be loyal customers... consume, human, consume.... but then try to limit what we can consume.
I just don't get it.
To Tatdroid's point, honestly I just don't quite get it.
Where is this extra price? Why is it that if I pay full price I still pay the same as you every month.
It's not like it's LISTED ON THE BILL. That's why people aren't upset about that.
You sign up for a plan it is: xx.00 for a minutes plan + xx.00 for data + xx.00 for any extras.
Doesn't matter if you purchase it outright or subsidized.
monkey_man
Member
:biggrin::biggrin::biggrin: When I read this ... reminded me about users saying be quiet to other users for data hogging. Business are always try to gain 200-300% profits, and I wonder they would tell you to shush. For in a tougher economy, people's ears tend to open up more.
hmmm I thought that extra price he mentioned was about the price disparity between phone carriers... I might be wrong tho
...PereDroid said:
No, it is not "listed on the bill." You do pay for it though. Carriers subsidize the purchase of your phone to get you on contract. The contract price includes them making up their subsidy plus a profit on the sale.
Smarphones are just plain expensive. If someone could undercut the retail price on top of the line smartphones then they would.
The problem with smartphone technology compared with some other products is that smartphones are really still in their infancy. The improvements we all love and want cost money to develop and implement. Until things level off, top of the line smartphones are going to be expensive. You can pay retail or you can feel better about the price and have a carrier subsidize it. You will pay for the advances either way.
I still think TatDroid makes an excellent point about the contract price. If you're not subsidizing the cost of my phone then why should I pay the same price as someone who's phone was subsidized?
Basically, phones need to be unlinked from the carriers. It would allow a truer plan comparison. I'm not holding my breath on that though...
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Really they are giving you a discount on the device. You can pay full price for the phone if you like and have your same plan that costs the same $$$
I bought my original Motorola Droid on release and I am still using it. I'm currently month to month on unlimited 3G and have no complaints with my phone, in all honesty i'm quite fond of it. I'm not excited about the current selection of 4G Phones, and I live in a rural area that likely won't ever see 4G service-
Should I renew my contract and use my upgrade now to get on unlimited 4G before this Shared-Data plan is unveiled? Razr Maxx? Or take a chance on Galaxy Nexus?
If I don't use my upgrade, and choose to switch to a 4G phone in the future and WISH to keep unlimited, will I be able to do this by paying full retail?
Should I renew my contract and use my upgrade now to get on unlimited 4G before this Shared-Data plan is unveiled? Razr Maxx? Or take a chance on Galaxy Nexus?
If I don't use my upgrade, and choose to switch to a 4G phone in the future and WISH to keep unlimited, will I be able to do this by paying full retail?
In light of the "update" that is now posted on post #1 of this thread, the "subsidized pricing" issue that I brought up takes on a whole new meaning. It's nice that Verizon is saying "if we're not paying to subsidize your handset, you can keep your unlimited data plan" - but to me that doesn't go far enough. I should get a discount on my monthly service, too.
There are many articles, like THIS ONE, or THIS ONE, that talk about what a bad deal subsidies are. They both mention the iPhone subsidy being about $450 (the $650 retail price minus the $200 customers pay = $450 subsidy per phone). That's about $20/month over a 2 year contract. Wouldn't it make sense that if I say to Verizon "Keep your phone, I'll use my own", that they would say "Great, since we're not paying $450 to subsidize your phone, we'll knock $15 per month off of your service plan"? They're STILL saving money over the $20/month subsidy they would have been paying, and I'm free to: 1) keep my current phone longer than 2 years, 2) buy a used phone from eBay, 3) buy the perfectly good phone that my tech friend ditched after 6 months, 4) or any other way I feel like acquiring my phone.
There are many articles, like THIS ONE, or THIS ONE, that talk about what a bad deal subsidies are. They both mention the iPhone subsidy being about $450 (the $650 retail price minus the $200 customers pay = $450 subsidy per phone). That's about $20/month over a 2 year contract. Wouldn't it make sense that if I say to Verizon "Keep your phone, I'll use my own", that they would say "Great, since we're not paying $450 to subsidize your phone, we'll knock $15 per month off of your service plan"? They're STILL saving money over the $20/month subsidy they would have been paying, and I'm free to: 1) keep my current phone longer than 2 years, 2) buy a used phone from eBay, 3) buy the perfectly good phone that my tech friend ditched after 6 months, 4) or any other way I feel like acquiring my phone.
It is set up much the way my tivo subscription is right now. A year and a half ago, I signed a 2 year agreement to keep my service with Tivo going at $19.95/month, but I got a $300 box for $99 (or something like that). Now that my 2 years are almost up I can either stay at $19.95 on a month-to-month or commit to another 1-year with them and it will come down to $15.95/month. They just don't want to give you any benefit unless they are getting something out of you (contract commitment or sale of hardware) and unfortunately they don't see not having to subsidize a device as getting something out of the deal. I'm not saying it's the right way to do business... but it seems to be the standard model right now.
One point that might be totally wrong and is just my opinion or guess is that with companies like this these costs are shared. Think of any cable or phone company, if you build a house they have to run a cable to your house to give you service. If you are not way off the road they absorb (or pass on) all this cost. So your monthly bill is $99 or whatever just like Joe Schmoe who had his service for years and hasn't even had a service call in a decade or w/e. The cost is spread out over all the subscribers to keep adding subscribers to the pot.
I used to work in the electronic security industry, very similar you can get a new system from some companies for $99 and sign for two years at $35+ a month. Okay so after that two years your price doesnt go down to $19 a month, you are now paying for the next new customer. Then in a few years your system is going to crap out or get hit by lightning and since they want to keep customers up they will usually replace your system free if you are on contract!
Well the systems can cost $900-2500 depending on the size of the house and most people dont know this but monitoring usually averages $5-10 a month cost per costumer, the rest is paying for equipment and profit. It may seem like a lot of profit but really it is paying for equipment and install etc.
So after saying all this, keep in mind you are paying for service, system upgrades (4G in your area or not) and probably for subsidizing other peoples phones too. So in my opinion you dont want to be the guy with the same phone for 5 years (I have been there!) and you probably dont want to just keep getting the latest and greatest either. All Companies want to have more money coming in than going out each month.
Personally depending on the cost of the family data plan I may be getting a no contract Google Samsung or w/e is current when my time comes. Though I like the leading edge $650 phones, I like the idea of saving potentially $75-$100 a month. I figure if I even save $75 a month I can justify buying a $500 phone every year. (I just need to bank my own upgrade money instead of giving it to VZW or any other carrier).
If you are willing to make the investment, take the risk on the phone or get your own private insurance you could potentially save $1000 or more in the contract period. I think some people just like the comfort of knowing I will be $xxx a month and no more than $100-200 when it is time to upgrade. This is why they like the unlimited plan, knowing their monthly bill each month.
My 2 cents +
I used to work in the electronic security industry, very similar you can get a new system from some companies for $99 and sign for two years at $35+ a month. Okay so after that two years your price doesnt go down to $19 a month, you are now paying for the next new customer. Then in a few years your system is going to crap out or get hit by lightning and since they want to keep customers up they will usually replace your system free if you are on contract!
Well the systems can cost $900-2500 depending on the size of the house and most people dont know this but monitoring usually averages $5-10 a month cost per costumer, the rest is paying for equipment and profit. It may seem like a lot of profit but really it is paying for equipment and install etc.
So after saying all this, keep in mind you are paying for service, system upgrades (4G in your area or not) and probably for subsidizing other peoples phones too. So in my opinion you dont want to be the guy with the same phone for 5 years (I have been there!) and you probably dont want to just keep getting the latest and greatest either. All Companies want to have more money coming in than going out each month.
Personally depending on the cost of the family data plan I may be getting a no contract Google Samsung or w/e is current when my time comes. Though I like the leading edge $650 phones, I like the idea of saving potentially $75-$100 a month. I figure if I even save $75 a month I can justify buying a $500 phone every year. (I just need to bank my own upgrade money instead of giving it to VZW or any other carrier).
If you are willing to make the investment, take the risk on the phone or get your own private insurance you could potentially save $1000 or more in the contract period. I think some people just like the comfort of knowing I will be $xxx a month and no more than $100-200 when it is time to upgrade. This is why they like the unlimited plan, knowing their monthly bill each month.
My 2 cents +
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monkey_man
Member
What a great exchange of thoughts here. Nowadays business are saying (just like few users here said too) if you don't like our fees and services, then feel free to find other providers to your likings. Very sad approach of modern business model really. This is I suppose today's normal approach that will end up in employees/union in asking better wages to support company's plan, but ending up with others suffering, since they don't work with the said company. Just pure selfishness. All about creating business gold rush and be on Forbes top 10 World's rich list. I would love to join a wireless carrier like yours Tatdroid, and you shall be the Modern Henry Ford! But can you and ambitious advisers whom want to climb up the ladder within your company, fathom the peer pressure of rivals that on Fortune 500 list? In other hand, it is also getting harder for entrepreneurs with brilliant ideas in getting loans nowadays to set up proper company. Many stories of today's entrepreneurs that I heard are either selling their promising business for quick cash and be instant millionaires/billionares, can't depend on investment as our Market are still not great as I can see the closing day result of the overhyped Facebook shares. I think this is one of F.Shamoo ideas too by trying to rejuvenate Verizon's shareholders by giving them some returns from profit (stuff they charged to their customers :icon_ devil
. When I watched a show called "shark tanks", I can see how many rich people forgot their upbringing by showing their greed to grasp more.
. When I watched a show called "shark tanks", I can see how many rich people forgot their upbringing by showing their greed to grasp more.