Duh...
Why should they give you the phone?
Consumers today often fail basic math. It's amazing so many have no clue about the money they spend but don't have. Financing is beyond their comprehension, they just sign and walk away in a fog.
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I think Apple iPhone is in serious trouble if US carriers end subsidies
- Thread starter aneftp
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Duh...
Why should they give you the phone?
Consumers today often fail basic math. It's amazing so many have no clue about the money they spend but don't have. Financing is beyond their comprehension, they just sign and walk away in a fog.
At least now, consumers will have the choice to purchase the phone elsewhere to receive a lower service fee from ATT or T-Mobile.
Assuming I'm interested in financing the phone, since I have to take a HP for credit check regardless, I mind as well find alternative financing, and pay a lesser service fee. For instance, I can apply for a new American Express card with a $150 sign up bonus, 15 month 0% financing, 1% cashback, and 90 day accidental/theft protection with a 1 year extended warranty.
Or, if I want to buy it outright, I can opt for a CC with a higher signup bonus, and forgo the 0% financing.
The difference now is (1) financing outside of the phone carrier will have better terms, and (2) will result in the lower no-contract price, which had never existed prior to T-Mobile's challenge.
The consumer is better much better off now than a month ago.
PS - Use an AmEx to buy an unlocked phone from Apple, and feel free to change carriers at your discretion. With the new Card Act, even if you close your CC, the balance is never due immediately, and AmEx will have to allow you to continue making minimum payments at the current 0% promo rate. I'd rather have the extra warranty from AmEx (since now it'll insure the full value of my purchase), rather than paying for Apple Care.
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Read my post you've just responded to. I did not say subsidies are ending, I said it's being considered.
You fail to comprehend what you've read.
Only those who can't afford the phone finance it. Since you don't understand financing I can't help you.
Simple, buy the phone with a CC with better terms from Apple (or, wherever), and the carriers can't stop you from doing anything.
You're ridiculous! So now financing is only there for the poor lol. Grow up
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Lol u don't see that there is no real difference from eft and the next "contract". Still stuck in a fog?
I think Apple iPhone is in serious trouble if US carriers end subsidies
Wrong. You are still locked into the carrier in exactly the same way.
Before: (subsidy with ETF) you have a two year contract. If you break it, you have to pay the ETF. The lump sum cost of the ETF is what locks you into staying.
After: (financed phone) you have a two year financing agreement on your phone, which is CONTINGENT on you maintaining ongoing service with your carrier. No contract, but cancel the service and you are now responsible for the lump sum of the remaining payments on your phone. All at once. The lump sum payment due if you stop service is what locks you into staying.
The net effect on the consumer is the same. They are given a disincentive to switch carriers in exchange for spreading out the cost of their phone over time. There is no effective difference except the details.
Because the financing obligation on the phone is contingent on maintaining service, they are inextricably linked. What did you think? You could finance the phone with tmobile, then stop service and switch to AT&T and continue to make your monthly equipment financing payments to tmobile? No freaking way.
If you paid cash for your phone outright, then things remain the same. You would never have had an ETF or contract, and you still don't. At least now you are getting better pricing for bringing your own equipment. Before they pretty much screwed you for doing so. (No subsidy, no contract, but same monthly costs).
Wrong. You are still locked into the carrier in exactly the same way.
Before: (subsidy with ETF) you have a two year contract. If you break it, you have to pay the ETF. The lump sum cost of the ETF is what locks you into staying.
After: (financed phone) you have a two year financing agreement on your phone, which is CONTINGENT on you maintaining ongoing service with your carrier. No contract, but cancel the service and you are now responsible for the lump sum of the remaining payments on your phone. All at once. The lump sum payment due if you stop service is what locks you into staying.
The net effect on the consumer is the same. They are given a disincentive to switch carriers in exchange for spreading out the cost of their phone over time. There is no effective difference except the details.
Because the financing obligation on the phone is contingent on maintaining service, they are inextricably linked. What did you think? You could finance the phone with tmobile, then stop service and switch to AT&T and continue to make your monthly equipment financing payments to tmobile? No freaking way.
If you paid cash for your phone outright, then things remain the same. You would never have had an ETF or contract, and you still don't. At least now you are getting better pricing for bringing your own equipment. Before they pretty much screwed you for doing so. (No subsidy, no contract, but same monthly costs).
All your post proves is that people are buying phones they cannot afford, under terms they cannot understand (like your analogy) and play victims of the carrier.
No one forces you to buy a phone you can't afford. Reasonable people finance houses and cars. Desperate people finance phones.
If not desperate why are they whining about getting screwed by the carriers...simple, they cannot come to terms with the truth. Most refuse to understand, playing the victim is their default position.
Personal responsibility? What? No one forced you to finance a phone.
The carriers are much smarter than most, they know vast numbers of consumers fail to understand money management. It's all about instant gratification. Get the phone you want now, worry about paying later. When later arrives it's the big bad carrier that's locked you in?
That's hilarious.
I didn't say anything at all about the big bad carriers or victimization or whatnot.
You were claiming that the phone subsidy ETF system was very different from the new contract free system with the financed phones. You said "wrong, the phone financing is a separate thing". It isn't. It's functionally the same damn thing. Before you financed your phone by making payments that were hidden in you monthly rate. Now things are just more transparent. But it's the same form of financial lock in.
Of course it is. Because the carrier has to be able to lock you in if it is going to make those expensive phones affordable to the masses. Without lock in, they can't make the phones affordable enough for the masses. The whole reason for the subsidy ETF system was that cellphones originally cost so much that people wouldn't buy them outright.
Nothing has really changed, except people get to be excited about "not being on a contract"
AT&T has deemed that $15 a month is what an iPhone subsidy is worth to them, so they will reduce your monthly rate by $15. That comes out to $360 + $200 down on the "current gen" phone for $560. That's almost $100 below retail (probably turns out about that after taxes are figured in for the majority of states that have sales tax).
Conclusion? Their in-contract subsidy is likely the better option for most people.
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If financing comes out to be the same (or maybe even cheaper as the example I posted above), wouldn't THAT be the reasonable thing to do?
This math only works out for the sub 10GB Mobile share value plans. As soon as you get to those higher tiers, your per phone cost drops to $15, but if you subsidize it jumps up to $40.
That's fiar, that's why I mentioned "most people". I doubt the majority fall under the 10GB+ category. Of course, I could be wrong.
You're probably right for 1 to 3 lines. I've got 5 on my plan so I just went for the 10GB plan. The 6-8GB plans would have ended up costing us more.
Except, the phone is Tmobile Branded, and is useless on Verizon & Sprint. Not sure if that model has AT&T LTE bands!?
My point, is that you aren't as free as you think. Free to me is being like Europe, where the SAME PHONE I buy will work on any carrier, WITHOUT restrictions.
This whole thread about Subsidies, $0Down, or Cash upfront is moot. It's really a question of do you want your savings up front (Subsidies) or over time ($0 Down), or are you a maverick, and pay cash.
I'm on a traditional plan and choose to take my savings up front and "own" the phone and not "lease" the phone.
It will be interesting to see how subsidies being removed will affect the phone manufacturers!?
You'd be right if I kept the phone, but that's what my Nexus 5 is for since it's unlocked & unbranded. Thus my point was that I can come and go from the carrier as I wish without the ETF expense of the past.
That said, I have no intention of leaving T-Mobile, the service is terrific and the unlimited data can't be beat.