“That’s the gist of a blog post he wrote in March where he argued the current U.S. model, where popular devices like Apple’s iPhone cost just $199 with a two-year contract, has significant negative implications,” Berte reports. “You see, that shiny new phone isn’t really $199 at all. And if you lost or broke one you’d realize that pretty quickly, as you’d have to pay $649 for a new one. Your carrier gets a better deal, but still pays double your price at around $400, according to The Wall Street Journal.”
Berte reports, “Ross Rubin, analyst with NPD Connected Intelligence, said removing subsidies would likely help level the playing field and suggested that might be why T-Mobile would be in favor of them going away. Large, profitable carriers of scale like Verizon Wireless, he said, can afford to more heavily subsidize handsets… Dumping subsidies and paying a lot more up-front for a phone might sound radical, but outside the U.S. it’s pretty common. ‘The North American markets (U.S. and Canada) are really the only two in the world that have this complete addiction to the phone subsidy,’ said Elliot Noss, CEO of Ting, a new pre-paid carrier.”
Much more in the full article here.
[Thanks to MacDailyNews Reader "Fred Mertz" for the heads up.]