On contract, yes. With Edge or owned phones it's $15 right now, so it seems it would be going up to $20 for those instead unfortunately.
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Verizon Introduces New Monthly Service Plans, Eliminating Smartphone Subsidies for New Customers
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Does this mean that Apple will no longer be able to advertise in their keynotes that the iPhone "starts" at $199, since all major carriers now use unsubsidized plans? If not, then would they go with an "around" $27/month or something else?
So you are instant that for your 2-year service commitment you are getting an unadulterated $450 signing bonus -- that isn't recovered or charged back to you surreptitiously.
To make be believe that; You will then need to explain to me why 2-year contract holders are the only post-paid customers that do not get a $15 or $25 discount on their monthly service depending on the amount of data they choose.
Buy your phone outright for full price? Discount. AT&T Next? Discount. Bring your own phone? Discount. It's almost as if customers who were given a $450 subsidy are being charged a hidden fee to reclaim that amount over a two year period.
Without a contract, I seriously doubt that Best Buy would offer an iPhone6 16GB for $199.99 (or less). It's conceivable without a contract they might discount an iPhone $100 of full retail price. Sales do happen.
If you're a Verizon customer having concerns over carrier financing when iPhone 6S comes out you need to call Verizon and ask them what your spending limit is. I've been with Verizon for almost 10 years and my approved balance is $5000 for devices which is way to much because I don't upgrade each of my 3 lines yearly. That amount is based on my length and payment history with Verizon. I can only assume that this same limit will just transfer to the new plan when it becomes active.
I ultimately believe that this is good for the consumer because too many people believe that $200 is the true cost of the iPhone which is not the case. The carriers hide the rest when you make payments for the next two years. It will also be interesting to see how Apple attacks phone cost when they unveil the iPhone 6S. They won't be able to hide behind carrier subsides.
I ultimately believe that this is good for the consumer because too many people believe that $200 is the true cost of the iPhone which is not the case. The carriers hide the rest when you make payments for the next two years. It will also be interesting to see how Apple attacks phone cost when they unveil the iPhone 6S. They won't be able to hide behind carrier subsides.
I'm glad to see that Verizon is following this model.
On AT&T, many grandfathered users of unlimited data think they've got gold and never want to give it up. I'm sure there actually are users who can justify keeping that, However, the reality is that many use way less data than they claim. This ends up costing them $100 or more every month just so they can say they have unlimited data. On top of that, their speeds are throttled every time they hit 5 gigs of usage. Have fun overpaying for 3G.
Really evaluate whether you need unlimited data and keep in mind, rollover data exists on AT&T.
I'm gonna have to read the original article and do some more research, but does Verizon offer rollover data?
On AT&T, many grandfathered users of unlimited data think they've got gold and never want to give it up. I'm sure there actually are users who can justify keeping that, However, the reality is that many use way less data than they claim. This ends up costing them $100 or more every month just so they can say they have unlimited data. On top of that, their speeds are throttled every time they hit 5 gigs of usage. Have fun overpaying for 3G.
Really evaluate whether you need unlimited data and keep in mind, rollover data exists on AT&T.
I'm gonna have to read the original article and do some more research, but does Verizon offer rollover data?
The problem is that At&t has their Next 12, Next 18, Next 24 and traditional 2 year contract. Sprint has a 24 month payment plan and 2 year contract and T-mobile plus Verizon is similar. I can't see Tim Cook showing a convoluted price chart during the keynote. So my guess is that At&T and Sprint will follow with a pure 24 month carrier financing plan.
Otherwise I agree with you; $27/month sure does sound better than $649 upfront. But then again saying $27/month is very misleading to so many folks without including monthly carrier cost. There are tons of people that still believe that $200 is the true cost of the phone.
Verizon does not do rollover data which is a shame. Why should the gigabytes I paid for expire?
I just ran the figures and in the past year I'm using an avg of 3.8 gigs of data per month. I'm paying 60.00 per month minus taxes and my 20% discount. On this new plan I've have to pick the large plan for 60.00 plus 20.00 for a smartphone that is 80.00
I think I'll stick with my unlimited and pay less with no worrying about how much data I'm using. Even though I'm not using 8 or 10 gigs a month I'm still saving and have the option to use more gigs if I ever want to after all it's unlimited.
Actually, I think your numbers are way off. First of all, VZW's capex last year was $10.5 billion. And their guidance for 2015 is $18-$19 billion.
Secondly, the $10B figure you quote regarding Vodafone (They've actually increased it to $11.1B, by the way) is over two years. 2015, and 2016. And it is part of a special project that Vodafone is undertaking known as Project Spring, which they are using to actually upgrade their whole network. It came after Vodafone divested itself of its interest in Verizon for $130B. It includes upgrading their 3G network in some major cities, and upgrading their overall 4G network. Additionally, I think you will find that Vodafone's capex is for their global network, and not just Europe.
Verizon, on the other hand already has a very extensive 4G (LTE) network in the US that they upgraded to over three years ago. The simple fact is, that given the size and topographic challenges of the US it is more expensive to build out and maintain a wireless network here. And, as I alluded to before, the return on investment in infrastructure in places like Wyoming, Montana, Idaho, etc. is far less than it more population dense areas, such as the Eastern half of the US, and most all of Europe. It's just simple physics.
As others have noted, US geographic coverage is huge, and often the population density is small.
AT&T and Verizon often each spend 10-20 billion dollars a year on infrastructure improvements.
They each have less than that in cash. (For comparison, Apple has 200 billion dollars.)
So it's no wonder they hate subsidies: when a new iPhone comes out, their stock can go down, because they sometimes have nearly a billion dollars stuck in up-front payments to Apple.
As for "obscene profits", compare all they have to do, to the profit margin that Apple makes, from which it has gained an order of magnitude more cash, yet does nothing with it.
A few years ago I tried Verizon and found they're really good at charging high prices. Already a happy AT&T customer, I happily gave the keys back to Verizon.
Last year I tried T-Mobile side by side with my long held AT&T service and found out that T-Mobile should only be used if you want terrific high speed connectivity and can handle saving a load of money....
Last year I tried T-Mobile side by side with my long held AT&T service and found out that T-Mobile should only be used if you want terrific high speed connectivity and can handle saving a load of money....
What works for some doesn't necessarily work the same way (or at all) for others, and vice versa. And that's just reality at work.A few years ago I tried Verizon and found they're really good at charging high prices. Already a happy AT&T customer, I happily gave the keys back to Verizon.
Last year I tried T-Mobile side by side with my long held AT&T service and found out that T-Mobile should only be used if you want terrific high speed connectivity and can handle saving a load of money....
Where are you getting these numbers? Typically Verizon includes FIOS and landline services when they tout their expense. Both of which you need to be sure are excluded. Are you including spectrum cost as well? Last I heard they spread out the cost over multiple years for accounting purposes (but I can't seem to find my source for that). Part of the reason VZW spends so much is because they intentionally run up the cost of acquiring spectrum to keep it out of the hands of potential competition.
As far as building out places like WY, the roll out is easy since it's flat, has few trees or buildings, and low network demand. Most of these towers are build to cover the major highways, and not local residents. The hardest part to manage is the north east, which is why they have so many COW's there.
Don't let them fool you about LTE. That was a cost savings that just happened to come with faster bandwidth. With LTE they could optimize the network reducing overall infrastructure costs. VZW could care less if we saw speed improvements. Same goes for XLTE.
This move may lead to less iPhone and high end Android phone sales.
I do like the change though. I hated being locked in two year contracts.
I do like the change though. I hated being locked in two year contracts.
I suspect that eventually Apple will have to list full prices in their iPhone keynotes. Maybe they'll do this next month with the 6s/6s Plus. They'll also list the financing details to try to mitigate the sticker shock which will be "new" to the formerly subsidized masses. If Apple just lists the financing details, it would be misleading. I also suspect or more to the point, hope that Apple will reduce the full price(s) by at least $100 or $200. So maybe it will look like this at the keynote:
$549 32GB iPhone 7 (16GB gone)
$649 64GB iPhone 7
$749 128GB iPhone 7
Add $100 to each capacity for the iPhone 7 Plus. I don't think Apple will reduce the price for the 6s, but you never know.
For Android it just means more discounts on flagship models even if they make little money. A phone like the 2015 Moto X Pure is already $400 which basically competes with the larger $750 iPhone plus. Android basically has a head start and Apple is unwilling to abandon it's price model.
I personally find it highway robbery to charge $650 for a device that cost $200 to make. It's time for a change and by not hiding the true phone price in a 2 year contract is a good start.
this is why I have the same plan I've had for 15yrs with verizon.. When they make that pitch " We can save you money on this plan" crap. Just politely say "no". You have to think about it. What company benefits from Saving you money? been paying the same $71 bucks a month for years now, I just buy the phones outright and take it out of the equation.
At least $15-20 more a month than I am paying now? That'll make it even more than paying AT&T's crappy new rates once I am out of contract next year. *sigh*
Pull out a world map.
Look at the size of England.
Now look at the United States.
Now calculate how many cell towers are needed to give the US the same coverage as England.
I like to compare and contrast things. I want to posit something to you -- Verizon and AT&T are supposed to be superior networks that offer better signal, larger service area, and greater building penetration. As such, their customers either tolerate or justify the higher price because of the superior service, right? The lower price points of T-Mobile and Sprint are, therefore, a reflection of their inferior service. Is that not true?
Might there be any correlation between between that and the iPhone vs Android sales market? I mean, by the above measure, it's implicit that the iPhone's higher price is a reflection of its superiority. And the lower price of Androids are a reflection of their inferiority.
I am grandfathered into Verizon unlimited data. We are 4 lines on a family share of 2000 minutes and unlimited texts. Also, several years ago vz gave us a discount on data, from $30 per line to $10 per line. So, we have a bargain.