You said that "considering that $1400 last year is $1530 today"
My mistake, that's supposed to be 1440.
$100 in 2006 is $105.40 in 2007--an increase of over 5%. The acceleration in pricing curves is projected higher this year, to about 8% based on the CPI (due to oil and food prices rising faster than the base inflation rate) according to BLS published stats. You are misunderstanding the effect on pricing to suggest a 3% number.
And really, since when do mobile phone rates increase annually with inflation? I know that mine never has...
They don't, but if you're calculating affordability and including the service costs, you must also take into account the purchasing power over time, whether it's one year or one month.
Agreeing to pay $2000 in 2000 isn't the same as agreeing to pay someone $2200 in 2005. In fact, in terms of "affordability", the higher amount is
more affordable. The asinine inclusion of additional fees (that you'd be paying anyway) is not directly comparable. If you're going to include service costs spanning two years in a bizarre convolution for the sole purpose of complaining, you should complain about the weak dollar more than anything else.
But doing that would mean admitting that paying the total amount this year is actually, at its most generous,
equal to paying last year's total amount. That would take all the bite out of the 'affordability' argument.
And we're not seeing any other price increases from AT&T in its other plans or from other vendors, which should be the case if this is in any way related to inflation. Over time tech prices generally go DOWN.
For products, not for services, and only to maturity, where prices begin increasing again. What happened to the $20 plans? You'll see today's cheapest plan is $39.99. Same with cable bills--steadily increasing.
Price plans are adjusted on a squaring curve. When service providers raise rates, they do so to front-load profits ahead of the inflation curve, so that as their expenses rise, the area behind the curve is equal to that ahead of the curve. When costs exceed that front-loading reserve, that's when you see rates increase. In the case of new products, the rate of price decline is limited by inflationary pressures. As long as real costs decrease faster than inflation, prices will fall. The intersection is where a product reaches market maturity.
My cellular bill in 1997 was one-third of what it is today. Prices going down, indeed.
He said that they were making the phone more affordable, which it isn't.
$399 to $199. It is. No representation of any kind was made about the service plan.
But I also don't think we need to go out of our way to justify higher service plan prices due to inflation.
No one is doing so. It's a simple illustration of selective variables, the same way you're using a service cost increase to say the phone is more expensive when it clearly is not.
The phone is not the TCO, and no one has ever claimed it was. The cost complained about was the high price tag
on the phone, and it was addressed with the new price.
