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AT&T and Verizon to follow T-Mobile and drop phone subsidy

AT&T and Verizon to follow T-Mobile and drop phone subsidy

  • Good thing for Apple

    Votes: 23 56.1%

  • Bad thing for Apple

    Votes: 18 43.9%
  • Total voters
    41
E

EbookReader

macrumors 65816
Original poster
Apr 3, 2012
1,190
1
When that happen, is it a good thing or a bad thing for Apple?





Both AT&T and Verizon are watching T-Mobile very closely. If T-Mobile is successful, they both might follow suit.

http://news.cnet.com/8301-1035_3-57577842-94/verizon-ceo-says-hes-open-to-dropping-contracts/

Verizon CEO Lowell McAdam cracked open the door to a full no-contract wireless world.
McAdam said it was "pretty easy" to change up the model to eliminate contracts, and added that he would watch the consumer response that T-Mobile gets from its recent decision to drop contracts and phone subsidies altogether. He indicated a willingness to follow suit if consumers start asking for it.
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http://news.cnet.com/8301-1035_3-57565740-94/at-t-ceo-says-he-likes-concept-of-handset-financing/

AT&T CEO Randall Stephenson, speaking to analysts during an earnings conference call today, said handset financing was an option he had looked at several times, and is one that he likes. He added he would monitor how the offer is received at T-Mobile before making any decisions.
Click to expand...
 
Bad for consumers! The carriers will still charge the same monthly fees that now include the phone subsidy. Consumers will still pay the same $ 70 (or whatever) they pay now plus they will have to buy a phone as well. Bah.

Only way this would be good for consumers would be if the carriers lower the monthly fees, which is about as likely as ...(insert absurd whatever)...
 
old-wiz said:
Bad for consumers! The carriers will still charge the same monthly fees that now include the phone subsidy. Consumers will still pay the same $ 70 (or whatever) they pay now plus they will have to buy a phone as well. Bah.

Only way this would be good for consumers would be if the carriers lower the monthly fees, which is about as likely as ...(insert absurd whatever)...
Click to expand...

of course they are going to lower their monthly fees. they have to as they are losing customers to tmobile. people are taking their unlocked hand me down iphone 4 over to tmobile and getting $40 a month plans. once the smartphone market has more universal lte phones then verizons customers can make the switch as well.

this will probably not be good for apple since the cost of the phone will become more apparent.
 
old-wiz said:
Bad for consumers! The carriers will still charge the same monthly fees that now include the phone subsidy. Consumers will still pay the same $ 70 (or whatever) they pay now plus they will have to buy a phone as well. Bah.

Only way this would be good for consumers would be if the carriers lower the monthly fees, which is about as likely as ...(insert absurd whatever)...
Click to expand...

I hope this wouldn't be the case and that AT&T and VZW would lower their monthly fees to be more competitive with TMO. Pricing out my three iPhones on TMO would be $150 . Thats Unlimited talk, text, and data. Right now a similar plan on AT&T with Unlimited talk, text, and 10gb of data is $210. TMO would be more upfront to pay for the devices. If AT&T were to stop subsidies and not reduce their monthly plan cost, Im sure consumers would start pouring into TMO.
 
Good for Consumers
It's a win for consumers all around. You wouldn't believe how many people sit with a phone beyond the two years and continue "repaying" AT&T and Verizon for their devices even after their contracts are up.

Not as good for AT&T/Verizon
Of course I don't expect AT&T and Verizon to lower their rate plans to match Tmobile in price since they have superior networks but they can still lower them somewhat. They would have to. Maybe something like a $70/80/90 plan instead of the $50/60/70 that Tmobile offers.

Good for Apple
For Apple I think it's a good thing because the upfront cost of the iPhone is lower with the way Tmobile sells it compared to the other carriers ($150 at T-Mo, $200 at the other 3). No subsidies also allows people to upgrade whenever they want provided that they pay off the full balance remaining on their current phone. It would make it easier for consumers to upgrade to the newest iPhone every year.
 
Last edited:
It all depends on if tmobile can steal customers. I'm overpaying att right now but would not touch tmobile with a 10ft pole right now as well. Lets see if tmobile can match att and Verizons coverage at their current price points.
 
Good for some consumers because of somewhat lower monthly fees. The monthly fees won't drop as much as you'd think though, because AT&T and Verizon will use a good portion of the savings to increase their profit margins.

Horrific for Apple. Apple will sell far fewer phones at $500-600 than they do at $99-199. If this change comes to pass, I wouldn't want to be an owner of Apple stock. Apple depends on iPhone sales for around 75 percent of their revenues.
 
I don't believe that T-Mobile's new plans have the kind of impact on the cell phone industry that will force Verizon and ATT to make similar moves. Until T-Mobile has reliable call and data service outside of large cities, Verizon and ATT will sit pretty on their profitable scheme.
 
KenAF said:
Good for some consumers because of somewhat lower monthly fees. The monthly fees won't drop as much as you'd think though, because AT&T and Verizon will use a good portion of the savings to increase their profit margins.

Horrific for Apple. Apple will sell far fewer phones at $500-600 than they do at $99-199. If this change comes to pass, I wouldn't want to be an owner of Apple stock. Apple depends on iPhone sales for around 75 percent of their revenues.
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This is a common myth. Apple still gets $649 for a phone regardless. Do you know why your AT&T bill is so high? Your paying atleast $20-$30 a month just to pay off the device. That's also why early termination fees are so high ($350), so if you quit the contract, ATT can still pay apple the $649.
 
gotluck said:
ATT already offers $60/MO gophone prepaid plans with LTE, 2gb ($10 per gb extra for a maximum of 5 total gb)
Click to expand...

Go phone division was made to compete against MVNO's.

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SoIsays said:
I don't believe that T-Mobile's new plans have the kind of impact on the cell phone industry that will force Verizon and ATT to make similar moves. Until T-Mobile has reliable call and data service outside of large cities, Verizon and ATT will sit pretty on their profitable scheme.
Click to expand...
So why are verzion and att talking about it? Why did att add LTE to the GoPhone? T-Mobile call service is not an issue it's their rual coverage, which does effect many. T-Mobile 4G coverage is impressive in areas surrounding cities.
 
I don't think it will affect Apple either way they get their 650 upfront. Better for consumers since u dont have to deal with contracts anymore and you will hopefully have more affordable options.
 
chanman said:
This is a common myth. Apple still gets $649 for a phone regardless. Do you know why your AT&T bill is so high? Your paying atleast $20-$30 a month just to pay off the device. That's also why early termination fees are so high ($350), so if you quit the contract, ATT can still pay apple the $649.
Click to expand...

If that were the case, your monthly cost would drop after two years... which it doesn't.
 
chanman said:
This is a common myth. Apple still gets $649 for a phone regardless. Do you know why your AT&T bill is so high? Your paying atleast $20-$30 a month just to pay off the device. That's also why early termination fees are so high ($350), so if you quit the contract, ATT can still pay apple the $649.
Click to expand...
Nothing I stated is a myth.

Apple gets $649 regardless but they sell as many phones as they do because most customers only have to pay $100-$200. Remove the subsidies and give the customer the option of paying $649 for an iPhone or $100-200 for an Android phone, and a far greater percentage of customers will choose the cheaper Android phone.

If At&T or Verizon currently allocate $30/mo toward phone subsidies then you might see a $10-15/mo reduction if they eliminate subsidies. The rest will go to their bottom line.
 
gotluck said:
ATT already offers $60/MO gophone prepaid plans with LTE, 2gb ($10 per gb extra for a maximum of 5 total gb)
Click to expand...

They changed their rate plan?

Last time I checked, it was $65 a month for 1GB of data, unlimited talk and unlimited text.



....
did a quick search, you're right. They updated their rate plan.

$60 = 2GB of 4G/LTE, unlimited talk and unlimited text
 
KenAF said:
Nothing I stated is a myth.

Apple gets $649 regardless but they sell as many phones as they do because most customers only have to pay $100-$200. Remove the subsidies and give the customer the option of paying $649 for an iPhone or $100-200 for an Android phone, and a far greater percentage of customers will choose the cheaper Android phone.

If At&T or Verizon currently allocate $30/mo toward phone subsidies then you might see a $10-15/mo reduction if they eliminate subsidies. The rest will go to their bottom line.
Click to expand...

You do realize that the way T-Mobile has things set up customers actually pay LESS upfront for their iPhones than with the other 3 carriers and with their "subsidies"? No one is walking into a T-Mobile store and dropping $649 cash upfront to get an iPhone, if that were the case then they would barely sell any. All T-Mobile did was move around the way the money is paid for the phone. You are told upfront that over the course of 2 years you will eventually repay them for giving you that $649 iPhone 5 for $149 instead of just hiding it in the rate plan cost and having customers think the phone is only $200 like the other carriers.

So to get an iPhone 5 from T-Mobile it costs $149 upfront, $79 for the 4S, $0 for the 4. How does this push people to Androids if AT&T/Verizon do the same thing? If anything it would help them sell more iPhones.

People are assuming Verizon and AT&T will not drop their rate plans if they dropped subsidies but there is nothing to suggest this would be the case. They would HAVE to drop their rate plans by at least $20 to make room for phone financing payments or else there would be no point. T-Mobile just reduced their rate plans by $20 to make room for phone financing and if you buy a high-end phone from them your monthly bill is essentially the same as it was on their old subsidy plans until you pay it off. Verizon/AT&T would likely do the same thing.
 
scapegoat81 said:
Good for Consumers.
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Absolutely!

I don't care whether it's good or bad for Apple. They're grown-ups. They know how to compete creatively and appeal to consumers. I'm sure they won't disappoint.

----------
TallManNY said:
...people are taking their unlocked hand me down iphone 4 over to tmobile and getting $40 a month plans...
Click to expand...

Which is exactly what I intend to do when my AT&T contract with four iPhone 4S's runs out next year. I've already told the kids there will be no new iPhone purchases next year so they'd better take good care their current ones. As a backup plan, I also have a couple of unlocked iPhone 4's from a previous contract that are flawless.
 
http://www.tmonews.com/2013/07/t-mobiles-iphone-5-sales-bumped-total-ios-market-share-up-3-5-over-last-three-months/

Interesting article
 
I'm totally for this so long as the monthly fee goes down. My bill being nearly $100 for one single phone is ridiculous.
 
Arran said:
Which is exactly what I intend to do when my AT&T contract with four iPhone 4S's runs out next year. I've already told the kids there will be no new iPhone purchases next year so they'd better take good care their current ones. As a backup plan, I also have a couple of unlocked iPhone 4's from a previous contract that are flawless.
Click to expand...

With 4 lines, that will be quite a saving. $25 per line.

$80 for line 1 and line 2 + $10 for 3rd line + $10 for 4th line = $100 for 4 lines.

Line 1: unlimited talk, unlimited text and 500MB of data
Line 2: unlimited talk, unlimited text and 500MB of data.
Line 3: unlimited talk, unlimited text and 500MB of data
Line 4: unlimited talk, unlimited text and 500MB of data

T-Mobile_Simple_Choice_Plans-630x206.jpg


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Ste Nova said:
meanwhile in the uk........ http://www.o2.co.uk/refresh
Click to expand...

The same as T-Mobile

With O2 Refresh, your monthly bill is split into 2 parts:

Phone Plan
the cost of the phone

Airtime Plan
all your data, minutes and texts

So when you want a shiny new phone, just pay off your Phone Plan. Choose which phone you want next, and then start again.

Paid off your Phone Plan, but don’t want a new phone just yet? Carry on paying just your Airtime Plan and have a lower monthly bill.
 
People seem to forget that you are still paying 20/month for 24 months for that t-mobile plan if you get a new phone (5). If you bring an old unlocked phone over you don't pay that 20/month but a lot of people don't want and old phone (which you have already paid the 649 or similar amount. If you drop t-mobile you still pay the 20 / month for the full 24 months.


The end result, to me, is that you end up paying almost the same thing from all the vendors if you buy a new phone with a plan.

I buy what has the best available service to me - more important than a few bucks a month if you don't live in an area with great service from all vendors.
 
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