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Phone prices

voyager1

Sep 29, 2009, 6:37 PM
I have a question. Why is the retail of cell phones so insanly expensive? They retail at nearly 420 dollars. I am aware that they do a lot and are realy neat. But for within less than 80 dollars more. We can purchase a playstation3 and the WII system together for for the retail of 1 cell phone costs. Or an I Touch and some play system. These days lap top computers even retail less than that or about it.
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epik

Sep 29, 2009, 10:36 PM
Your answer is inside your own question.

Who makes money when a cell phone is sold to the carrier for $420? Who makes money when a PS3 or Wii is sold to the store? Is it the carrier? Is it the store?

No. It's the manufacturer.

The manufacturer knows the carrier is going to make their profit elsewhere, so there's no real reason to sell the phone for much less than what we see today. The manufacturer doesn't get residual income when they sold their phone to the carrier. There's no incentive to be competitive when the carrier can just recoup the cost from the end user.

A PS3 works the same way. There's no profit in the console. For the store, there's money to be made in the game and peripheral sales. The manufacturer cleans...
(continues)
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Azeron

Sep 29, 2009, 11:11 PM
Well said. This is why I wish consumers had to deal directly with the manufacturer. How often has someone called in trying to haggle over the price of a phone. I try to explain to them that the carrier makes no money of the handset...they make money of the service. With the meddling FCC about to get involced maybe they will ban contracts giving carriers no reason to subsidize phones then customers can call LG or Samsung and try to get phones at a discount.
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Kenton2k

Sep 30, 2009, 3:03 PM
Agreed, well said.
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