Posted on 01/19/2016 3:15:13 AM PST by Up Yours Marxists
You won't be getting a subsidy on your new smartphone in 2016.
AT&T (NYSE:T) and Sprint (NYSE:S) are the last two of the four major wireless carriers to do away with the two-year phone contract and subsidy model. Now, any new contract requires customers to pay for their new smartphone upfront or in installments separate from their service bill.
Verizon (NYSE:VZ) killed off smartphone subsidies in August, and T-Mobile (NASDAQ:TMUS) is now three years removed from its Uncarrier initiative that kicked off this whole trend. Ultimately, wireless carriers could be better off for it, and big phone companies like Apple (NASDAQ:AAPL) and Samsung (NASDAQOTH:SSNLF) have plans to take advantage of the change as well.
How the wireless carriers benefit from no contracts Two-year contracts have practically been dead for some time now since competing carriers have offered to pay early termination fees for customers willing to switch to their networks. Therefore, the negative impact from customers being able to switch carriers more easily should be minimal.
At least with the new system of installment and early upgrade plans, carriers can benefit from customers when they decide they want to upgrade equipment before their two-year contracts would be up.
(Excerpt) Read more at fool.com ...
Possibly. The so called “smart watches” may see a new kind of applicability they never did before (or were never intended). Perhaps something like smart watches directly syncing with computers, after the ability to send and receive calls are added to the watch itself.
Most likely short term though, little impact will be felt in the smart phone market. The payment plans make it virtually like having a “two year contract” because the cost works out to be about the same, on a monthly basis, once the payment per month is factored in.
It really all depends on whether or not a company can make some kind of receiver of calls (like the smart watch above) much lower in cost than the current phone. People are now too addicted to all the features of a smart phone and also the ability to make and receive calls anywhere.
The age of the pay phone (the phone booth) is what’s dead.
You could also see if Verison will give you a better deal by telling them what others are offering for your business
I personally will never be on a locked phone ever again. It makes travelling very convenient. I only have to buy a simcard and prepay time where I am.
Apple already created its one lease/upgrade plan, get your phone from them pay them so much a month and trade up whenever you want.
I agree the two year cycle of guaranteed big sales are over for the manufacturers but the only actually making any money has already adjusted. Not sure how it will work out but depending on their monthly fee to lease probably will about the same to lease plus service as it is now for service with phone for 2 years.
Well I didn’t mean worsening a lot. It’s slightly more expensive this way I think. But not terribly so.
“Now, they can securitize these contracts and sell them to institutional investors...”
Subprime cell phone bubble ahead.
it is wise to remember that an I phone is in reality a hand held computer with a telephone ap
The US model was buy subsidized equipment and overpay for service. The rest of the world’s service was cheaper, but folks bought their own equipment. Now, US carriers want to retain their high pricing and stop the preferred equipment pricing. We’ll see how that shakes out.
The US model was buy subsidized equipment and overpay for service. The rest of the world’s service was cheaper, but folks bought their own equipment. Now, US carriers want to retain their high pricing and stop the preferred equipment pricing. We’ll see how that shakes out.
People will just add it to the payments. My sister’s cell phone bill is $350 a month for 2 phones.
Precisely
She uses her phone as her internet connection.
All they are doing is breaking out the monthly bill so that consumers can see what they are paying for service. If they want the latest and greatest phone, they can setup a monthly payment plan to pay that separately. The two bills combined will probably not be much different than what they were already paying combined.
I have Tracfone and get good service at a very reasonable cost — about $8/month. Purchased minutes roll over.
I live in an area that does not have 4-G and I do not actually do much Internet related on the smartphone. I do have the phone connect my local home network WiFi, however.
I do not make many phone calls, so I do not have to worry much about the minutes usage.
You should suggest to her to turn off data, when not in use. Everytime it pings a tower,you’re paying data.
I bought a Motorola (Moto E)smartphone/Tracfone package via QVC for $99.
It is 3G, but my area doesn’t have 4G, with triple minutes and an initial bundle of 1200 minutes (talk, text, data, and 1 year of service). I do not use anywhere near that much time via smartphone for talk + text + data.
Not bad for about $8/month. My old, now disconnected, landline cost me $25/month + long distance.
If you expect the unexpected. Isn’t the unexpected expected?
The payment is static. It’s a set amount which is why it is so high. It would be cheaper to just get a home internet connection but that’s talking to a brick wall.
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