You're definitely talking to the right person. That's why I knew for certain that Dmunjal didn't have any idea what he was talking about. Thank goodness I decided not to use my electronics degree but rather become a Medicare insurance agent. I know plenty about drugs and how they are paid for and I assure you, they are not subsidized by anyone but the citizens who pay for them. I deal with the medical field and hospitals everyday. If anyone on is on Medicaid and gets their health plan or drugs subsidized the tax paying citizens are paying for it.
But back to the discussion, Dmunjal has no idea about cellular phone subsidies based on what he said. None of it made any sense.
I completely agree.
I started this thread because I see a major problem in the telecommunications industry. That is, I believe the consumer is being gouged. Cell phones and their associated plans cost too much money. The carriers have been "gouging" consumers for years.
One example is the "system access fee" that was charged each month to Canadians from the big carriers. $2-$8 per month was the charge. This was a CRTC (FCC equivalent in Canada) tax. It started that way when cell phones were becoming mainstream years ago. Then the CRTC dropped it. But the carriers kept charging it. A class action lawsuit was then started and may still be ongoing. None of them charge it anymore...
It's this, and all the little things carriers to do get extra charges out of you that make people's bills add up. At one point, Fido had tens of thousands of delinquent accounts that they eventually had to write off.
The costs and complexity of the plans in addition to the expense of smartphones makes mobile telecom incredibly expensive for consumers. My issue is with the entire industry. And I am here specifically focused on this:
Why do smartphones like the iPhone 6 Plus or even the Samsung Note 4 cost so much money to buy outright? Particularly when the same technology from the same companies (e.g., iPads) cost substantially less to purchase outright?
One hypothesis is that the manufacturers and the carriers both benefit. First, it disincentivizes people from shelling out for an unlocked phone due to the high unlocked buy price, where they'd be free of being locked into a crappy, inflated, subsidized iPhone plan and locked into that for 2 years. Second, is that Apple makes money from the carriers on subsidized plans as well: there's a major veil of secrecy here. And third, by pricing the devices so high unlocked it encourages people to just get it subsidized.
This to me illustrates that it's very profitable for Apple the subsidy model, or else they'd just dump the price to what they think customers will pay outright for unlocked phones and sell tons on volume.
Here's the deal with subsidies. Apparently, carriers get a sligthly discounted price on the phone, and customers pay it off over 2 years. Apple may share in subsidy revenues OVER AND ABOVE what the carrier paid them for the phone.
Further, carriers may have been secretly collecting further subsidies from users AFTER their 2 year term was up on renewal using the same phone or another one they bring to the contract.
It's been a marriage of convenience. They never loved each other, but Apple and the cellular carriers made buckets of money by convincing people that they weren't really paying as much as $650 for a "$199" smartphone -- and (secretly) $200 more per year for every year the user keeps that iPhone after its subsidy is repaid.
http://www.infoworld.com/article/26...-iphone-war--it-s-apple-vs--the-carriers.html
My point is that this is a complex issue where pricing is so intertwined with the industry as a whole that all of this needs to be taken into consideration when discussing pricing of smartphones unlocked. The things that affect it. Whether it's fair market value or an output of a broader conspiracy to gouge the consumer. And whether this could be seen as not in the public interest.
. Calling plans cannot be played in the role of economic costs. Apple has nothing to do with the calling plan prices. That's a service you're paying for to use a feature on the equipment and it most certainly is optional when you buy the phone outright. Just like paying for your electric bill.
