Verizon Wireless to Eliminate One-Year Contracts
1 Year option - What ifs?
The what if lies in the difference of the price. Would you as consumers choose a 1 year agreement if the discount was more reflective of the revenue difference on the subsidized handset? The pricing model now is flawed. Paying $30 or $50 more to eliminate an entire year of revenue is not an equitable pricing model when th...
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Secondly, this particular thread is about the what-ifs of the proposed pricing scenario. Verizon is quite confident (arrogant?) that if you sign up to their network you will stay. If they can attract customers by offering a choice that remains profitable why would they not do it? This question is posed to those who swear by one year agreements.
If you want to have a discussion as to the theory as to why then please start another thread.
In any event, I posted my last response before reading this far and apologize for not answering the question posed. The answer is no. If I have to pay that much for a one year contract then I would rather pay the full retail price or a slightly reduced Ebay price.
I do get to listen in and contribute to some pretty high levels meetings and it is interesting how decisions are made. Nothing I would ever share here but I don't think the "conspiracy theories" so many espouse are even remotely true.
The manufacturer makes a killing on a phone - much more than they make on most another other electronic product. And they pass that killing on to the distributor, who adds a little bit for their own trouble. Then the carrier takes the price they paid and rounds it up slightly, knowing they're going to subsidize it down the line. That initial inflated cost get's absorbed, in part, by the carrier. The other part is passed onto the customer - not so much on the price of the device, but in the monthly plans that make the carrier decent profits.
Carriers wouldn't have to subsidize so much if the manufacturer wasn't raking in the dough on their mobile phones. If carriers didn't have to sub...
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Being in the electronics industry and now wireless I would say all electronics are priced this way. Manufacturer to distributor to retailer. Typical margin on electronics is 35%-40% at retail price. Take a Droid X, if you add 35% to the current cost it is MUCH higher that the price available non-subsidy. Very few retailers sell their product just above cost.
The $1000 Flat screen probably only costs best buy $600-$650. Yes Samsung is making a hefty profit on a $650 flat screen, production cost may be in the $300 range. But how much R&D goes into a TV compared with wireless? I don't know the answer but I would believe the figure is far less than wireless.
I guess I don't have a problem with a company m...
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This forum is closed.