Why the contract?

Discussion in 'iPhone' started by bigpoppamac31, Oct 22, 2011.

  1. bigpoppamac31 macrumors 68000

    Joined:
    Aug 16, 2007
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    Canada
    #1
    Why do all these wireless companies have to bind people to a contract just to keep them? My thought is that if they offer great products, plans, and services then the customers would stay all on their own. But the contract is not even my biggest gripe. It's that I'm also bound to the phone I choose as well. If I want to upgrade I have to wait out the contract and the kicker is that when I do upgrade I have to sign another contract for another three years. That's a bit over the top if you ask me. Kind of forces customer loyalty instead of promoting it.
     
  2. MacDawg macrumors P6

    MacDawg

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    #2
    With the iPhone, one reason is the high cost to the carrier of subsidizing the price of the phone
    Binding to a contract helps cover the costs
     
  3. r.j.s Moderator emeritus

    r.j.s

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    #3
    You are not bound to a phone, you can change phones at anytime - you just have to pay full price for the phone.
     
  4. MadGoat macrumors 65816

    MadGoat

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    #4
    Because they're offering the phone at a discounted price and it's a way of recovering their costs. If you don't want the contract, buy a contract free phone at full price.
     
  5. cyks macrumors 68020

    cyks

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    #5
    Buy any phone you want free and clear and you won't have to sign a contract.... but if you're expecting the phone company to pay the bulk of the phone's cost, you should expect them to want to make sure you stick around to pay it back to them.
     
  6. gloryunited macrumors 6502

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    Oct 29, 2010
    #6
    They do NOT offer great products, plans, and services. That's why. :rolleyes:
     
  7. bigpoppamac31 thread starter macrumors 68000

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    #7
    I just think people should be able to upgrade at least once a year to a new phone without paying full price and signing a new deal. Would make things a lot easier.
     
  8. D1G1T4L macrumors 68000

    D1G1T4L

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    #8
    I think we should just get free phones when we want. Why not :p
     
  9. Bryan Bowler macrumors 68040

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    Sep 27, 2008
    #9
    If they did that, you'd have to pay a lot more than you do for the phone...
     
  10. MadGoat macrumors 65816

    MadGoat

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    #10
    How long have you had your 3G for, how long have you been with your carrier? is it Rogers, Bell, Fido, Telus? If you have been with them a while and you've had your 3G for a long time, you might be able to upgrade for cheap.
     
  11. jca24 macrumors 6502a

    jca24

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    #11
    you obviously do not understand how the contracts and subsidized pricing works
     
  12. canadianpj macrumors 6502

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    Jun 27, 2008
    #12
    Considering what most people pay for a contract you pay for the four three or so times over before all is said and done. Yet, if you try to leave even a month before the end of the contract it's treated like a crime.

    I went unlocked with the iPhone 4 and if I can at all help it will not sign another contract.
     
  13. mrkramer macrumors 603

    mrkramer

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    #13
    Except it would make prices much higher since someone has to pay for the phone. If you don't want a contract then pay full price for the phone.
     
  14. bigpoppamac31 thread starter macrumors 68000

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    Aug 16, 2007
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    Canada
    #14
    The cost of the phone could simply be spread out month to month on your bill. Therefore the phone still gets paid for. The contract (as stupid as it is) is not the big issue for me. It would just be nice to be able to trade up/upgrade more easily without all the restrictions.
     
  15. jca24 macrumors 6502a

    jca24

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    #15
    in a contract the cost of the phone is spread out, 649-199=450. the 450 is spread out. you are paying the 450+monthly fee+profit for phone company over the contract.
     
  16. bigpoppamac31 thread starter macrumors 68000

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    #16
    Anyway. No one understands what I'm trying to say.
     
  17. fireshot91 macrumors 601

    fireshot91

    Joined:
    Jul 31, 2008
    Location:
    Northern VA
    #17
    No, what we're saying is that the price of the phone is IN the contract.



    If you want to get a phone unsubsidized without a contract, you're free to. You just have to pay the price for it.


    If you want the carriers to pay for most of it, then sure, sign a contract, stick around for a bit for the carriers to make up their cost (2 years), and then you can leave.
     
  18. Fernandez21 macrumors 601

    Fernandez21

    Joined:
    Jun 16, 2010
    #18
    but then the plan would cost more per month. What you don't understand is that the phone costs $600-$800, the only reason you get it cheaper is because of the contract.

    you could always buy using a credit card and pay it back within the year and it would be the same.
     
  19. greg555, Oct 22, 2011
    Last edited: Oct 22, 2011

    greg555 macrumors 6502a

    Joined:
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    Canada
    #19
    That's kind of what Koodo in Canada does. They do a credit check on you and then give you $150 towards a phone (they call it a tab). So the day you sign up (but you aren't signing a 2 or 3 year contract) you owe them $150, but every month they take 10% of your bill off the tab. If your monthly bill is $50 then your tab will go down by $5 per month until it hits zero (in 30 months in my example). If you cancel your service before getting to zero you have to pay them the remaining tab but since there's no contract you don't owe them any early exit or other fees.

    If you stay with them past the point it hits zero (or buy an unsubsidized phone at the start) then your tab can build up towards the next phone you get.

    Not too bad a system.
     
  20. iphoneclassic macrumors 6502

    Joined:
    Oct 12, 2011
    Location:
    USA
    #20
    It is a way to gurantee continues revenue for the carrier. Or atleast to make share holders/investors believe. In not so diplomatic way "it is easy way to cook the books".
     
  21. TheNinjaJedi macrumors regular

    TheNinjaJedi

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    Jul 16, 2011
    #21
    This would make no sense for the carriers to do this.. none at all.
     
  22. outphase macrumors 65816

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    Parts Unknown
    #22
    I wonder what's to stop people from leaving the carrier after they get the discounted device. If only there were some agreement in place to ensure that the customer would remain on the carrier until the device is paid off. :cool:
     
  23. bigpoppamac31 thread starter macrumors 68000

    Joined:
    Aug 16, 2007
    Location:
    Canada
    #23
    All I'm saying is that the phone should not be so tightly tied to the contract. If I have to sign a three year deal so be it. Just let me upgrade even once a year to a new phone. The phone can't be that expensive that it can't be paid off in the first year.
     
  24. r.j.s Moderator emeritus

    r.j.s

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    Location:
    Texas
    #24
    So, you have no idea how much a phone actually costs, do you?
     
  25. urkel macrumors 68030

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    Nov 3, 2008
    #25
    Thats true, but with the costs of phones being nearly 4x more than cost of parts then I'm really hoping Apple breaks the system again by offering their product at prices that wouldn't require a contract. And with apple having such a streamlined product cycle and loyal fanbase then they seem to be the only ones capable of doing this.

    For example, if it costs $188 for iPhone parts then charging $400 should cover R&D and manufacturing and still have room for a healthy profit. And by eliminating contracts that bind us to carriers then we're more likely to upgrade every year which is a win for Apple and the consumer.
     

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