Why won't carriers offer contracts?

Contract for what?

If you want the smallest data plan for your iPad for 2 years it would cost more than the $199.

They all seem to like the plans where if you do not use them, you lose them at the end of the 30 day period.

 

Because contracts are related to subsidized devices and not discount pricing.

 

Maybe Apple doesn't want to do it. Perhaps they figure that they're having a hard time meeting demand without a subsidy/contract. If they sold it for $299 w/ 2 yr $30/mo contract, they wouldn't be able to make them fast enough.

 

One big reason I chose the iPad over Android tablets is the fact that a contract isn't required.

I'll buy Verizon's 2GB plan for a month to make sure things are operational (including hot spot functionality). Then, I may go months without needing 4G. I love the ability to pay only for what I need!

 

The last thing you'd want is another contract. I'm sure it's much easier for Apple, in addition to the consumer, to sell without.

 

Not necessarily. I think with a proper system selling hardware separate from service will result in better choice and pricing for consumers.

It's a major problem in north america where consumers truly don't understand the value of a mobile phone.

 

They are here in the UK.

 

Don't forget how reluctant Apple was to sell the iPhone at a discount with a contract. They didn't want the device to be devalued in consumer eyes, and they were right to think that: it has been. Most people don't care about the real value of any phone they buy, all phones really cost the same now, around $200. It's only on used phone sales that the device holds its value.

So maybe Apple doesn't want that to happen to the iPad as well.

 

I'm pretty sure AT&T and Verizon have both complained briefly about paying Apple off on phone subsidizations, not to mention the time/money they spend on training their employees on Apple and training other places' employees on their service plans, so it wouldn't shock me if they're the ones who are resisting this concept. Also, as someone who sells Apple products I believe that month to month usage, when used cleverly, is one of the best features of a 3G/4G iPad, so I would be bummed if that changed. The other thing is that if buying an iPad got into contract signing and all that jazz then the locations it could be purchased at would diminish. I work for a retail-based Apple authorized reseller and we do not sell iPhones because we don't want to go through the headaches/expenses of partnering with the carriers. Apple is very shrewd, so if they can sell it at more locations by staying away from contracts then that is exactly what they're going to do.

 

No, because if they can't make them any faster, then they can't get any additional revenue from selling more.

 

Am I reading this right? You think the carriers are the ones opposed to a contract-subsidization model?

 

I can't cite any specific articles off the top of my head, but I very distinctly recall the carriers vocalizing their concerns with how much money they were paying to Apple up front for contracts that take 2 years on average to close out. It makes perfect sense that they would experience anxiety over taking on another Apple product that sells by the millions. AT&T/Verizon may want to keep that money in their pocket instead of paying Apple to facilitate contract generation and then waiting to get paid back by the end users. Also, subsidizing a 3G/4G iPad wouldn't result in the same discounts as it does with the iPhone because we don't pay the carriers for minutes and text on the iPad, so how much money would really come off the top at that point? $300 at the most? Think about all the effort that the carriers would exert to make that happen, and for what? They still make their money either way, and without subsidizing the purchase they get their money more sooner than later.

Ultimately, my point is to still be careful what we wish for. The consumers and resellers would benefit very least from this if it happened in my opinion. You seem to think my opinion is wrong though based on your comment, so oh well. Other thoughts?

 

I'm glad they don't. The last thing on earth I want is another contract. If the phone business wasn't so screwed up I'd just buy unlocked. problem is paying the extra money for the unlocked phone isn't really worth it because your STILL limited. so might as well take the discount. I hope apple eventually puts an end to all this. they sell the phones you pick the carrier. same phone works on everything. then att and verizon would really have to compete on price of service because youd be free to bounce month to month.

 

Why? I don't want another contract. Next thing you will ask for a TV with a comcast contract!!!!

 

Carriers give retarded discounts on tablets anyways.

They knock off 500 dollars for picking up a cellphone with a 2 year contract.

They knock off a hundred or two if you get a tablet.....

On top of that you wouldn't want to be locked to a contract on a tablet anyways. The tech moves so much faster than cellphones. You would definitely want the option to upgrade to something better.

 

You can buy Android tablets without contract. You just pay the higher unsubsidized price for it like you are doing for the iPad. I had a Verizon Galaxy Tab 10.1 without contract.

 

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The reason is probably twofold. One apple probably doesn't want to actually have subsidized iPads which may cut into their profit margins. The other reason is that while the iPad is used for heavy Internet consumption, we generally usually have more time available or where there's Wi-Fi available. Using the 4G plans and three you plans it works really well because you can activated and deactivated whenever you would like. I don't see carriers having any success in the future at all offering subsidized pricing on tablets particularly Apples iPad. It's makes sense for a phone where we need it on the go. iPad is the same, but only to a certain degree. Consumers are more "wifi aware" on a tablet.

Besides, I am sure that Apple is more than happy with the killer number of iPads they are selling at in subsidized prices as-is.

 

Last thing I want is another contract with a wireless provider.

 

Maybe because contracts suck.

 

I have wondered this too. There are a lot of people who would get one since the upfront cost is considerably lower. When I worked sales that's something I could always count on. Almost no one ever opted to pay it all up front.

But you'd have to wonder why they'd even bother. There are folks coming in for data only packages and the carrier never has to loose out on the price of the device. Or you can buy the WiFi only edition and get a AT&T or VZW hotspot card.

 

Yeah, that's how I ended up getting my original iPad. 16GB wifi + 3G cost me £75 just after the second one was released. Bargain!

 

No, I don't necessarily believe your opinion is wrong. On the surface it definitely does look like it's a good thing for a consumer to get a contract if it saves them several hundred dollars on a device.

The fact is though, carriers love the contract-subsidy model. When a phone is sold on contract and a consumer given a $400-500 subsidy for signing a contract, the carrier doesn't necessarily lose $400-500 up front. Most of the time the hardware is highly inflated in price only to make the contract price look extremely appealing. And that includes iPhones. Last year for example, the iPhone 4 32GB went for $750 non-subsidized while a 32GB iPod touch 4th gen went for $300. Obviously the costs are a bit different between the two because of the cellular radio, camera, body, but enough to really warrant a 150% increase in price? Heck, even the new iPad 32GB with 4G is listed cheaper than the iPhone 4S 32GB.

The other thing is that carriers more than make up for the subsidy throughout the monthly payments during the contract. Tmobile for example has separate pricing when you bring your own device or don't take a subsidy, and it saves you $20/month on certain plans. In europe too (from what I've seen) the rate plan is nearly in direct correlation to the subsidy you received on the hardware. If you are paying only for service it can be quite inexpensive.

In my opinion, I'd love to see a full disconnect of mobile phones and contracts/subsidies from carriers. I'd much rather see good selection of hardware in retail, choose a device, and later pick a carrier. Similar to how Apple's been pushing the iPad. Choose service from any carrier and move as you need. Competition at retail between different manufacturers and the loss of inflated non-subsidized pricing will definitely help to drive prices down as well.

 

Not true. If iPads had the same cost structure as iPhones, they would cannibalize each other's sales. Customers don't want to spend $30 a month for data plans on a phone AND a tablet. Its like paying for the same thing twice. That structure might make people think hard about buying both.

The no contract option lets people have their iPhone with monthly contract, but also have an iPad with the ability to turn on the 3G/4G only when they need it. $30*24 over 2 years or $30*(your choice). What would you pick?