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Are Verizon’s Android customers paying through the nose to subsidize iPhone prices??!

Posted: , by Scott H.

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Are Verizon’s Android customers paying through the nose to subsidize iPhone prices??!
Verizon charges a lot for its Android phones. Looking at comparable phones on other networks, you can see that Verizon routinely charges $100 for an Android phone that’s identical but for the addition of an LTE radio. Verizon has justified this by claiming that LTE phones are “premium” devices, but the reality is that an LTE radio doesn’t dramatically increase the cost of a phone.

Examining industry subsidies and the timing of Verizon’s change in price structure has led some industry observers to a darker explanation of their pricing strategy: Verizon may be raising prices on Android phones to offset the large subsidies they have to pay Apple for the iPhone.

Apple has negotiated a ~$450 subsidy for every iPhone a carrier sells on contract. It’s an industry-leading number that other handset manufacturers can’t command. To be fair, Apple has created much sought-after products, and their popularity is why carriers will agree to their terms. Still, as a result companies like Sprint and Verizon see their profit margins shrink when they added the iPhone to their stable of mobile devices.

Sprint famously had to pony up $15.5 billion dollars in guaranteed money to land the iPhone, while some foreign carriers have had to drop Apple's products due to the high subsidy. Verizon may have found a different way to make up that revenue: adding $50-100 to the on-contract pricing of their leading Android handsets.

Recall that the CDMA iPhone 4 and the HTC Thunderbolt dropped at about the same time, and while the iPhone 4 started at the usual $199, the Thunderbolt was increased to a $249 on-contract pricing. Verizon saw its margins shrink in the first quarter with brisk iPhone sales, but in Q2 Verizon upped the on-contract price of the Droid Charge to $299, and that’s been the cost of high-end Android handsets on Verizon ever since.

Phones like the Droid RAZR are not significantly more expensive to make than last year’s top-of-the-line Android devices. So the conclusion some have drawn is that Verizon is padding their bottom line to offset the impact the iPhone has on their margins.

What do you think? Does the cost of rolling out Verizon's LTE network make it worth the price bump? Is Big Red robbing Peter to go pay Paul? Is it all some crazy conspiracy theory?

Let us know your thoughts in the comments below, but please try to make this a constructive exchange of ideas!

source: Apple Insider

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posted on 16 Dec 2011, 12:44 4

1. WirelessCon (Posts: 309; Member since: 11 May 2010)

The whole subsidizing model needs to be reformed. Resellers offer far better knowledge and customer service. Something that benefits those kind of businesses would only enhance the carrier's ability to retain customers and income.

posted on 16 Dec 2011, 12:48 2

5. Sniggly (Posts: 7305; Member since: 05 Dec 2009)

That model was already reformed once; the indirects obtained higher commission payouts for smartphones than simple phones to offset the higher cost of the smartphones.

However, if more changes arrived which would help the indirects to not have to sell their phones at a price up to 100 dollars more than the carrier stores, it would be nice.

posted on 16 Dec 2011, 12:50 2

9. bossmt_2 (Posts: 449; Member since: 13 Oct 2009)

Having worked in corporate stores, resellers IMO can offer you a more customer rich experience because they usually have more time to focus on a single customer since they're generally not destination locations.

Now that I've got that out of the way, resellers are nothing but a pain in the butt to corporate Verizon, including things like higher churn rates, more customer complaints etc. I know there are good resellers out there, don't want to knock all of them, but some out there are bad businesses.

posted on 16 Dec 2011, 14:05 1

23. stilt (Posts: 63; Member since: 13 Jul 2008)

im glad you said that there are good resellers out there cause i work for a reseller for almost four years now and we have to shut down the store because of a damn corp. is about a minute down the street. I aid customers waaaaaay better than any corp store rep can

posted on 18 Dec 2011, 12:57 2

62. atheisticemetic (Posts: 377; Member since: 18 Dec 2011)

third party all the way! in the corporate store you just get upselled and told ALL products are "great"

it gets really old. In fact we had a corporate store steal from my old stores inventory because it got shipped to the wrong address.

not all corp stores are bad, but their selling practices are!

posted on 16 Dec 2011, 15:06 2

29. bigdawg23 (Posts: 449; Member since: 25 May 2011)

Just remove the ungodly mark up and I will pay outright. I have no issue with $400, however, $549 is over board.

posted on 16 Dec 2011, 23:07 2

44. ardent1 (Posts: 2000; Member since: 16 Apr 2011)

It's people like bigdawg23 that the no-contract / prepaid market LISTEN and is delivering mid-range to low-range android devices at VERY competitive prices. In hindsight, I clearly overpaid for my Triumph at $300 when I could have picked it up for half price ($150!!!!) during black friday / cyber monday weekend.

The last time I was at Best Buys, I counted over 60 no-contract android devices for sale -- all under $180. There's no reason to sell a device for $549, much even $400. Those devices should not cost more than $350!!

posted on 17 Dec 2011, 07:25 2

46. remixfa (Posts: 14255; Member since: 19 Dec 2008)

tell that to apple. until then, premium phones get a premium mark up.

posted on 16 Dec 2011, 12:44 6

2. Sniggly (Posts: 7305; Member since: 05 Dec 2009)

You know, I never thought about it that way before. I always assumed the higher LTE cost was Verizon's way of helping offset its investment in the 4G network. However, it makes sense, and goes along with the general rule of thumb that whenever Apple is involved, others' profit margins sink.

posted on 16 Dec 2011, 13:57

21. rendHELL (Posts: 304; Member since: 09 Nov 2011)

hey where is your twin lil sniggly alias Lucy????

banned again??? lol...

posted on 16 Dec 2011, 16:50 2

35. Lucas777 (Posts: 2137; Member since: 06 Jan 2011)

but i dont see why verizon and sprint wud want the iphone if it was making everything horrible for them... it is not logical for it to be so detriemental when they both clearly wanted it

posted on 16 Dec 2011, 12:47 3

3. gallitoking (Posts: 4718; Member since: 17 May 2011)

Thank you Mr. Jobs for creating the iphone that revolutionized.... and changed the cell phone game...

iphone made from Android manufacturers..

carriers pay to carry the iphone

resells better than any phone in the planet.

I could go on.. but I want to give the haters some ammo

posted on 16 Dec 2011, 12:49 4

8. Sniggly (Posts: 7305; Member since: 05 Dec 2009)

FYI, this is not an example of keeping you nose clean. This is an example of doing your best to piss people off.

posted on 16 Dec 2011, 12:52 3

10. roldefol (Posts: 4253; Member since: 28 Jan 2011)

Sniggly, this is the Troll King we're talking about. At least he's trolling on an iPhone-related article.

posted on 16 Dec 2011, 13:14 2

15. tacohunter (Posts: 408; Member since: 06 Nov 2011)

If you call that trolling then you all troll about how great android is. He's not talking lies.

You just are using your ammo (and it's not much) on him.

posted on 16 Dec 2011, 13:26 3

17. roldefol (Posts: 4253; Member since: 28 Jan 2011)

When we go on iPhone articles and post about how much the iPhone sucks, yes, we are. But Gallito knows he's just pushing buttons and has fun doing it. Hail to the King!

posted on 16 Dec 2011, 13:37 2

19. tacohunter (Posts: 408; Member since: 06 Nov 2011)

And why do you have to compare android to iphone everytime (while talking mostly lies, and i search if you're talking the thruth). You never talk about other companies or you talk to less about it.

So I've encountered many comments were people did so. And it has an inverted effect. Gallito talks no lies here.

It's like comparing android froyo with ios 5. That's how i read some things. That's unfair. And if apple does something they wanna do it right not rushed.

posted on 16 Dec 2011, 14:03 4

22. roldefol (Posts: 4253; Member since: 28 Jan 2011)

Exactly, which is why there was a lot more backlash from Android fans than the rest of the tech sphere when the 4S was announced. Apple views the current LTE hardware as too immature and bulky for the iPhone, and they have ergonomic justifications for their 3.54" screen. The 4S has gotten a pass for its lack of hardware innovation because it's still a fast, intuitive phone with a great camera.

I get annoyed that the first thing out of the Fandroids' mouths after an Android phone gets a great review is "This will crush the iPhone once and for all!" You and I know the iPhone isn't going anywhere. But it's not just the comments fanning the flames - professional reviews of the Razr and Nexus compare it to the iPhone, even though there are so many design differences I can't see anyone cross-shopping them.

Gallito craps all over Android, but I still appreciate his humor. Whereas the other partisans around here - on both sides - tend to just be meanspirited. But hey, flamewars increase site hits, right?

posted on 16 Dec 2011, 14:51 2

28. tacohunter (Posts: 408; Member since: 06 Nov 2011)

Thx for your comment. I appreciate it.

posted on 16 Dec 2011, 17:10 1

39. jacko (unregistered)

iphone that revolutionized.... and changed the cell phone game lmao


posted on 16 Dec 2011, 12:47 4

4. bossmt_2 (Posts: 449; Member since: 13 Oct 2009)

Actually I think more than subsidizing for the iPhone (though I would imagine that factors into it a bit) they're "punishing" Early Adopters by upping the price on LTE devices due to the R&D. They did a similar thing with EVDO when it launched. Remember that 6 years ago or so 3G devices were expensive. As the radio price comes down and the Network isn't in rapid build the prices will come down.

On that note, compared to the iPhone, Verizon 4G devices are still a good deal, you're getting 32 gigs of memory in pretty much every single LTE device out there.

Though it is amazing how Apple does business, if a competitor did this (locking in subsidized costs and upselling as much as they do) Apple would be up in arms.

posted on 17 Dec 2011, 18:42 2

56. ILikeBubbles (Posts: 525; Member since: 17 Jan 2011)

as if apple hasn't already tried to ban some of android's top manufacturers in many countries INCLUDING the U.S.

as far as the price bump it makes sense that Apple is sort of a siphon on profit because all they care about is their own profit short game, however as a few people have said so far i believe that it is possible for LTE to be part of the reason.

it all comes down to Supply & Demand... as new technology is released the technology that it replaced is much less desirable. Comparable to how dual core processors came down in price once quad core processors became mainstream in the PC market?

it's still no excuse for Verizion... but maybe it will change soon...

posted on 16 Dec 2011, 12:49 8

6. roldefol (Posts: 4253; Member since: 28 Jan 2011)

It's a very interesting theory, and I'm cynical enough to believe it. It doesn't make me dislike Verizon's business practices any more than I already did, or enjoy their service and LTE network any less. One look at the retail price of their phones tells the story: the 4S, Nexus, Rezound and Razr all retail at $650, yet those Androids are all $300 on contract. Are we subsidizing the iPhone or the LTE network? I'm not sure I care. I know that for my $300, I'm getting a tiny computer, MP3 player, GPS, gaming system and phone all in one - with the potential to blow the speed of my home WiFi out of the water. Is it competitive with other carriers? Probably not. But as long as Verizon keeps pouring their profits into building out the nation's best 4G network, I'm willing to pay.

posted on 16 Dec 2011, 12:49 4

7. LewsTherin006 (Posts: 140; Member since: 18 Nov 2011)

Yep it does kinda make sense, but its very dirty. Why punish the people that help you make money in the first place?

posted on 16 Dec 2011, 12:57 4

11. roldefol (Posts: 4253; Member since: 28 Jan 2011)

We won't know until next year when the LTE iPhones arrive, but I am curious to see if the redesigned iPhone is still priced lower at Verizon when it's fully competive with the Android heavyweights.

posted on 16 Dec 2011, 13:09 1

12. safetyfrog (Posts: 12; Member since: 12 Dec 2011)

I always thought it had to do with the fact that all of the phones an $299 had 32gb of storage either through on board or on board with a memory card except the HTC rezound which makes the difference with the beats headphones but it does make sense.

posted on 16 Dec 2011, 13:19 2

16. roldefol (Posts: 4253; Member since: 28 Jan 2011)

That's a pretty weak argument though, unless you actually believe the 32 GB iPhone is worth $100 more than the 16 GB. Memory is so cheap, we shouldn't pay more than $50 for the difference, and that includes a 100% markup. I originally thought they charged $300 for the Charge because of the SAMOLED+ tech, but then everyone priced the SGS2 at the old $200, so there went that theory. No, I think Verizon charges $300 for LTE Androids simply because they can.

posted on 16 Dec 2011, 13:12 5

13. som (Posts: 768; Member since: 10 Nov 2009)

Go to wirefly.com or amazonwireless.com that cost 50% less than Verizon store.

posted on 16 Dec 2011, 14:30 3

26. iHateCrapple (Posts: 734; Member since: 12 Feb 2010)

Watch out, probably a used/refurbished phone.

posted on 17 Dec 2011, 18:51

57. ILikeBubbles (Posts: 525; Member since: 17 Jan 2011)

even amazonwireless? What are some good 3rd party retailers that are worth buying from?

posted on 16 Dec 2011, 13:14 3

14. bloodpanther (Posts: 32; Member since: 15 Jul 2010)

I noticed in an ad this last weekend they were selling an iphone 4s at a discounted price. I knew this would start happening. There is no way a company can hold onto its thrown for this long without someone coming out with enough assets to take the initial financial hit. You will start seeing this happen more and more. As soon as Amazon starts discounting these phones it is going to go drop fast.

What am I saying? Basically apple will not be able to keep their "my way or the highway" attitude for much longer. You start flooding the market with your product your supply will go way up and demand way low.

posted on 16 Dec 2011, 13:28 5

18. downphoenix (Posts: 3165; Member since: 19 Jun 2010)

Im sure Verizon would have still introduced the higher subsidies if they never got the iphone or didnt need to offset the cost. They love to rape their customers wallets.

posted on 16 Dec 2011, 13:52 1

20. mills0806 (Posts: 37; Member since: 13 Nov 2011)

All you have to do is buy the phone somewhere else if you don't like the price. You could also wait for it to go on sale. Me personally when i need to upgrade my phone it is usually not just one phone it is two. One for me and my girlfriend, there is no way in hell i would buy two phones for a total of $600+. Some stores will price match, thats what i did for my last phone when Amazon had a backorder on a phone i wanted.

posted on 16 Dec 2011, 14:07 2

24. warlockz (Posts: 156; Member since: 10 Oct 2011)

Useful article for a change pa. I agree lte is not worth 100 more and if this theory is true its amazing how apple created more hype than what its worth. Nexus phone which I alone predicted dec 12 week release date :) as much as I like the phone I'm not paying 300 to vzw. I will be getting it from amazon!

posted on 16 Dec 2011, 14:14 2

25. hepresearch (unregistered)

... and who said that the iPhone is so great and wonderful because it competes so well and forces Android OEM's and carriers to lower the cost of their Android-powered products in order to sell them at all?

posted on 16 Dec 2011, 14:33 1

27. cupcake (Posts: 106; Member since: 15 Apr 2010)

Wow this is an interesting point. I agree that three hundred bucks is too much for a phone..unless it does holograms..?
However Androids go on sale quite a bit making them, sporadically, very affordable. I think Apple discounted their products $5-$10 on black friday?

posted on 16 Dec 2011, 15:24 1

30. cober319 (Posts: 11; Member since: 10 Nov 2011)

$300 has been a deal breaker for me and getting flagship phones. For those of us that are on a budget but still want a (somewhat) future-proof phone, a $100 makes a large difference. I've spoken with quite a few people who are willing to pay the $200 but not the $300. I'm curious as to the volume Verizon may be losing with people either holding on to an older phone or changing carriers for cheaper intro prices...

posted on 17 Dec 2011, 17:21

54. Goldeneye (Posts: 419; Member since: 22 Jan 2011)

The price of the handset is just the tip of the iceberg, I mean if you can afford to own a smartphone even the free ones why not expend one extra Benjamin for a better device the data plans are the same for every device, that's what makes smartphones expensive, the service not the upfront cost

posted on 16 Dec 2011, 15:28 1

31. jamrockjones (Posts: 345; Member since: 26 Oct 2011)

And that's why Apple sucks!!!

posted on 16 Dec 2011, 15:43 4

32. stjcripes (Posts: 27; Member since: 31 Mar 2010)

I live with two VZW employees. Shortly before the 4S launched, they (and everyone else in the district) were sent to an Android refresher training, and since then, there has been a push from above to sell more Android devices instead of iPhones. They find this extremely frustrating especially since their commission is based partially on return rate - Android returns are common, whereas, Apple returns are rare. Of course when they ask why, they're rarely told more than what you or me are told. I suspect, though, that VZW's using more than higher Android prices to subsidize the iPhone. Not too long before the advent of the CDMA iPhone, the notorious $35 Restock Fee was implemented to recover the "lost revenue" of returned devices. Eventually, the return period itself was reduced from 30 to 14 days, and it wasn't too long ago that we saw the elimination of the New Every Two and Early/Annual Upgrade loyalty programs (taken away under the guise of "cheaper devices for all"). Employer-specific discounts have been scaled back recently, as well. Verizon even followed AT&T's lead on tiered data plans for handsets, even though LTE was lauded for higher and cheaper subscriber capacity per site. To say 4G LTE handsets merit any kind of premium just for having those five characters (and the chipset, of course) is laughable, to say the least. Why then, as I'm typing this, do I see a banner ad to the right advertising an LTE MiFi (new) for only $49.99? I could've bought a 3G MiFi for that same price last year. No, it's accountants in Cupertino and Basking Ridge that are the reason for this "premium". I understand business. I understand that Apple and Verizon are for-profit organizations. Apple, if your product is superior, make us pay the premium for that - we always have. Verizon, if charging fees and scaling back discounts is what you need to do in order to include a much sought after device in your product offerings (and if it's worth it), it's ok to say so. Just don't lie to me and other customers, and sure as hell don't lie to your own retail employees trying to build trust with every door swing 40+ hours a week! (Note: I'm currently on my second Android handset)

posted on 16 Dec 2011, 16:36 3

34. warlockz (Posts: 156; Member since: 10 Oct 2011)

Very well written comment. Finally someone on here that has their business cap on and writes coherently. Vzw definately charges a premium it sucks that in nyc other carriers coverage is not that good or else I would have left vzw already.

posted on 16 Dec 2011, 16:59 1

37. nickjjay (Posts: 79; Member since: 10 Oct 2011)

I agree. That was the most well-written post that i've seen in a long time. I worked for verizon and he couldnt be more on point with everthing except for Verizon pushing the android phones over other phones. If you sell a smart phone, you get the exact same commission weather its thw iphone or and android phone. There are definitely certain managers and district managers that push android or apple more than others, but thats their personal preference.

Great thought provoking artical though. It definitely seems like a reasonable conclusion based off the evidence.

Oh. And one more thing, i couldnt agree more that Verizon keeps their employees in the dark as much as possible. Its prettyevident that the most important thing to them is the almighty dollar. But AT&T is worse.

posted on 16 Dec 2011, 16:21 1

33. iamcc (Posts: 1319; Member since: 07 Oct 2011)

I dont mind paying $300 even if it is to help subsidize the iPhone. Without all of the income from iPhone sales i doubt Verizon would be able to expand LTE so aggresively. As with Verizons plan prices as well i dont mind paying a premium price for a premium service.

posted on 16 Dec 2011, 16:56

36. troybuilt (Posts: 155; Member since: 16 Dec 2011)

As a reseller myself, I've noticed that the dealer don't get much of any comp for selling the iPhone. Anyone on here on commission should noticed this. It's nationwide issue with Apple. I've got friends that work in other retail business selling the iPad and the iPhone and they also tell me the same thing. I have noticed the bump in pricing from Verizon with the Android phones, it's like we have to pay extra for them to continue to sell the iPhone. I think Verizon needs to drop Apple, why lose money to gain more customer base. Every cor store and retailer should know this, at the end of the sale you end up paying Apple for the sale.

posted on 16 Dec 2011, 17:01 1

38. troybuilt (Posts: 155; Member since: 16 Dec 2011)

I did notice one other thing to mention here is that HTC Rezsound and the HTC Vivid have the same specs except for the new audio "beats" on the Rezsound and AT&T is charging $99 for the Vivid on a 2 year for that phone, while Verizon is selling it for $300 on a 2 year. Verizon's phones must be made of gold.

posted on 16 Dec 2011, 17:27 3

40. networkdood (Posts: 6330; Member since: 31 Mar 2010)

You have a choice - DO NOT BUY THE PHONE....

I bought my DROID RAZR for 1 cent.....I did my way :-)

posted on 16 Dec 2011, 19:24

41. Motatrola (Posts: 33; Member since: 27 Oct 2011)

Charge the i$heep more money!!! But I also understand charging more for the 4G network, I don't think it was cheap to roll out... And it is superior to everything else, so it would demand a premium price, no?

posted on 16 Dec 2011, 19:49

42. Firedrops (Posts: 249; Member since: 06 Sep 2011)

Or be like my country's telcos, and not subsidize iPhones at all. the 8gb 4S was launched at around SGD$600, other models up to $900 while at that point in time, the GSII was around SGD$350. Both prices are for the same 2 years of contract terms. It vexes me how well the 4s sold here.

posted on 16 Dec 2011, 20:11

43. remixfa (Posts: 14255; Member since: 19 Dec 2008)

the lil droid guy is adorable. gotta say.. lol

posted on 16 Dec 2011, 23:33 1

45. CRICKETownz (Posts: 980; Member since: 24 Oct 2009)

so...let me get this straight, Apple is not only responsible for its own negative press or whatever outlook individuals have but now...its responsible for negative press for other companies? talk about scapegoats...man. Verizon has always housed the quality Androids compared to the mediocre line up that has been found on other networks initially when Android rose to fame. then you had the complaining & moaning about prices which devices like the LG Ally, Moto Citrus etc. came about. Now you have devices like the Stratosphere or Pantech Breakout (though not Super AMOLED/1.5 Dual Core) that are a decent price & LTE enabled, but if you want all the bells & whistles...why would anyone expect that type of phone fit the same pricing tier as the entry level/mid-range Androids? So when Apple charges $299+ for a device...its all Apple on that one, but when Android starts to match these prices...then its b/c of an Apple subsidy? i don't buy that...

posted on 17 Dec 2011, 07:29

47. remixfa (Posts: 14255; Member since: 19 Dec 2008)

"android" isnt matching prices. VZW is. Apple sells 1 model at that price range. VZW is launching pretty much anything that says "LTE" at that price range, regardless of what it is. You are already paying a premium to be on VZW's service, and then you have to pay a premium for an LTE device that costs like 1 buck more to make than a non LTE device?
When the Nexus comes to other carriers it wont be 300 anywhere except ATT because they will do what ever VZW does.

We only have to blame ourselves. If people stopped paying 300 for a darn phone on contract, then they would stop trying to charge 300 for a phone... iphone or android.

posted on 17 Dec 2011, 23:51

58. CRICKETownz (Posts: 980; Member since: 24 Oct 2009)

i'm sure it costs less than $10 more to produce an LTE device but unfortunately me & you don't have the know-how or resources to produce an LTE phone. i've always hated the "it costs pennies to make" argument b/c ppl neglect to look at what all costs goes into the production of a product (a place to produce products, machinery, lights for that warehouse, etc). no one cares about that side of things tho...its all about how can i get a deal on a phone. if smart phones rise to a $500 price tag...then i'll have to gracefully bow out. a smart phone isn't worth all that to me...but for some it is. as far as paying a premium on Verizon...aren't you getting reliability in exchange? it would be one thing if they were high & there wasn't a reputation of best coverage behind it.

posted on 18 Dec 2011, 09:03

59. remixfa (Posts: 14255; Member since: 19 Dec 2008)

yes, you are paying a premium for the coverage. I used to work there. They really have the coverage and very few people ever have an issue with that.

But honestly, most people dont need that coverage. We tend to stay within a few miles of our house and work, and for the bulk of us, thats high population centers like large towns and cities. We travel through airports and highways. Almost all of that is covered by nearly any carrier. Most of us hear about a time where our friend was stranded with no coverage from another carrier, or you personally lost coverage for a moment with another carrier.. and you get scared into VZW. The reason their churn is so notoriously low is because people are afraid to leave.. because they "might" one day be without coverage on another carrier.

They have definitely earned their rep for coverage. They have it. But for 99.5% of the time in a population area, you can find the same coverage for much much less. Its all about where you live.
I just did a 2000 mile round trip last year from FL, to SC across the mts to TN then up n over to PA, MD, and back down to FL again. The ONLY time I lost service was in the very back hills of GA (it was like a 50s horror movie there). May not have had 3g/4g the whole time, but i definitely had voice service.

Its all relative to what you want to do.

posted on 17 Dec 2011, 09:13 1

48. ChafedBanana (Posts: 381; Member since: 20 Sep 2011)

Big Red is NOT robbing Peter to go pay Paul. Apple is simply raping Big Red with their over priced subsidy. Thanks to Apple, I have to pay $100 more for my Android than I should. All the more reason to hate the iPhone.

posted on 17 Dec 2011, 11:32 1

49. hepresearch (unregistered)

So, Paul buys an iPhone... while Peter buys a high-end Droid. Big Red makes Peter pay $100 extra on his price in order to pay the $100 that Paul did not have to cover as an iPhone buyer... which Big Red had to cover instead, by taking the extra $100 from Peter, in order to pay Apple for the privilege of selling the iPhone to Paul in the first place (because Big Red thought that they could not get the additional customers they wanted without selling the iPhone, and were willing to allow themselves to get raped by Apple in order to attract said new customers). Thus, by extension, Paul is actually raping Peter for $100 in this transaction... with Big Red refereeing the process as Apple watches longingly from behind the one-sided see-through mirror in the back. Although Apple and Big Red have already completed their "transaction", neither Paul nor Peter actually knows that this is, in fact, going on because Big Red is in between them...

Apple rapes Big Red... Big Red entices Paul to buy an over-subsidized Apple product... Big Red charges Peter extra on his non-Apple selection in order to cover Paul's iPhone purchase subsidy... but in reality, all this does is to make Paul a rapist, via Big Red as proxy, while Peter is the totally-unaware victim on the other end of Big Red... Paul has plausible deniability, and Peter unknowingly agrees to take one for Team Big Red and Apple...

Dahhhh... Apple and Verizon... the sick, twisted freaks that the economy can't seem to do without! Gross...

posted on 17 Dec 2011, 11:56

50. remixfa (Posts: 14255; Member since: 19 Dec 2008)

they need to make the iphone 300 to make it fair. people should not be forced to pay apple basically when they are buying an android device. If the iphone is really "iconic" and the "best phone" there is, then it would sell like hotcakes, not just because its super subsidized.

That actually says a lot that the iphone needs to be subsidized more than the android phones.

posted on 17 Dec 2011, 12:24

52. hepresearch (unregistered)

The iPhone doesn't need the extra subsidy over the Android devices... it is a good device and will be popular no matter how much people have to pay to get it... I suspect that this is being done intentionally to add insult to injury against Android and the "mobile freedom" movement, and to accelerate the crippling blow to Android that iOS is already well into dealing out.

The solution: if you do not want to be a freeloader to the tune of $100, get a feature phone. If you do not want to get raped to the tune of $100, get a feature phone... I know it sounds terrible, but smartphones these days either make you a thief by proxy, or just a victim, depending on which side of the smartphone wars you fall on.

I was liking the idea of considering a nice, cheap, simple, stable and smooth iPhone 3GS for my next device (once I can afford the stupid data plan that AT&T will require me to have), but now I am wondering if AT&T is also a proxy rapist thanks to Apple... I do not want to be on either side of economic rape. I may have to rethink the idea of going back to smartphones altogether... a feature phone is probably the safe way to go, and to not be either stealing from someone or being stolen from by another.


posted on 18 Dec 2011, 09:05

60. remixfa (Posts: 14255; Member since: 19 Dec 2008)

why would you be on ATT? Get it unlocked and go tmobile. 1500 mins w/ unl data for 30 bux, or unl text n data with 100 mins for 30 bux.... or unl everything for 50 bux.. all no contract prepay options.
Or wait n find one on craigslist for sprint. Either way will save you tons over ATT/VZW.

posted on 18 Dec 2011, 20:13

65. hepresearch (unregistered)

T-Mobile does not work where I live now. Sprint will not support the iPhone 3GS, and I do not want to deal with "antenna-gate" issues on the iPhone 4. I do not want to have a 4S either... it is too expensive and way too new for me.

I am sort of stuck right now. Besides, I cannot switch providers until I can afford to pay for my own plan... until then I am stuck with whatever I can get my parents to provide (which means sharing minutes on their AT&T Nationwide 550 family plan, and *maybe* getting them to buy me a free phone on a new contract... but that's a big stretch, as they don't want to be roped into unnecessary contracts).

posted on 17 Dec 2011, 12:21 1

51. tha.fox (Posts: 100; Member since: 30 Nov 2011)

36. troybuilt posted on 19 hours ago 0 2
As a reseller myself, I've noticed that the dealer don't get much of any comp for selling the iPhone. Anyone on here on commission should noticed this. It's nationwide issue with Apple. I've got friends that work in other retail business selling the iPad and the iPhone and they also tell me the same thing. I have noticed the bump in pricing from Verizon with the Android phones, it's like we have to pay extra for them to continue to sell the iPhone. I think Verizon needs to drop Apple, why lose money to gain more customer base. Every cor store and retailer should know this, at the end of the sale you end up paying Apple for the sale.

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100% correct since the iphone launched ive lost security access to over half of the company reports i used to be able to see and look at. apple not only ruined the way our company functions but completely changed its rules. Also if the iphone is so much more expensive then it needs to be priced higher than it is. They need to price accordingly to have close to equal profit. since the iphone 4s launch my whole verizon locations profit has cut in half as well as our pay checks. Not to mentions our location cant have it yet we can only order the phone or send the customer 2 doors down to apple just to come back to ask me to activate thier phone because apple just sells it and trows them out of the store. Apple is exctly the oppisite of the american way and ppl need to realise who they are giving their money too!

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