This is actually an interesting option. We switched our cells to paygo and use Skype with a number. We're saving over $1000 this way over the next year alone. Now we have a way to get rid of the paygo too!
Sadly, the extra 200$ is a fair price. They recoup that money over the course of your contract... Perhaps they could prorate the discount for the amount of time you're through your term?
Further, the only reason they were able to offer the discounted price when shifting from 2g to 3g was the additional 10$ a month they made off the new data plan. For the 3gs, they'll actually lose money on upgrading customers because their bandwidth costs go up.
I'm guessing most contracts are two years long because that's the most Americans will generally sign. People expect they'll want a new phone in that time (at the longest) and maybe want to switch carriers.
I will be angry if these people do get the subsidized price. Being logical, I skipped the 3g hoping for more features around the time my contract expires on my 2G that I paid $600 for. Just because Apple releases a new phone every year, doesn't mean you should get it every year for cheap.
This is where lack of basic maths skills really bites the average person. I wonder if the practice of mobile phone companies selling "cheap" phones could be considered fraud, given that many people are apparently unable to understand it.
The optimum outcome of this would be for phone companies to give up the practice, as it only enrages customers in the long run.
its a catch-22. subsidizing the $600 iphone is the only way to get dump people to buy the phone, but it also means you'll have to spend time explaining why they can't have 2 iphones for the price of 1. At the same time, they should make it more clear how the payoff schedule works...if i decide 1/4th the way into my contract that AT&T sucks, i should be able to pay 3/4 * (amount subsidized) + interest and thats it.
True, but realistically, if you call AT&T, you should be able to talk them into giving you some benefits that amount to roughly that? It is just a shame that they make it complicated for you. But their benefit is that a lot of people won't bother and just pay the higher price.
Wrong, and wronger. People fully understand they're getting the phone with strings attached. It isn't that they're too stupid to do the math, it's that humans are predisposed to value now over later, because there might not be a later. It's a symptom of our evolutionary history, and the phone companies know it.
The optimal outcome for them is to use that to get people locked into their service for two years, and give them a device for $0 that a company without a contract would have to ask $200 for. They're not stupid, at some point somebody surely said "hey, what if we sold these phones for a higher price unlocked" but then everybody laughed and that guy felt like an idiot.
"People fully understand they're getting the phone with strings attached."
I honestly doubt that. I have often heard people say "hey, that phone only costs 10€ with O2, but 100€ with T-Mobile" and stuff like that. It never occurs to them to compare the rates they would get without a phone with the rates they get with the phone.
Probably there are lots of psychological studies about that (similar to the x.99cent prices in supermarkets). But that is why maths is important (among other things) - because it can protect you against the failures of your brain.
I think Apple has more to answer to here. Why can't they enable the voice controls and video capture on the old hardware with the update?
Hardly think AT&T is to blame that you can't use features your phone is capable of using in the OS 3.0 update, and therefore should get a subsidized upgrade.
I've heard a lot of back and forth about subsidized pricing and how this is standard procedure for phone companies.
The problem here is that Apple is a company that drives its customers to constantly buy the latest gadget. Cell phone subsidies make the early adopters feel like they're getting shafted, as they are not eligible for the advertised price.
The real solution here is to only subsidize the "average consumer" version of the device, or to avoid subsidy programs that are significantly longer than the time span between different versions of the device. A 2 year subsidy makes no sense if Apple is producing a new phone in less than a year.
That's the solution right there - only offer subsidised prices based around 12 month contracts, then the fanboys get to upgrade every year around the time the new phones come out but they have to pay a bit more for the phone.
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[ 3.0 ms ] story [ 65.5 ms ] threadhttp://truthseekernz.blogspot.com/2009/05/ipod-touch-and-sky...
This is actually an interesting option. We switched our cells to paygo and use Skype with a number. We're saving over $1000 this way over the next year alone. Now we have a way to get rid of the paygo too!
But you get what I'm saying: it's just bits in packets, and we could do so much more if voice weren't special.
Further, the only reason they were able to offer the discounted price when shifting from 2g to 3g was the additional 10$ a month they made off the new data plan. For the 3gs, they'll actually lose money on upgrading customers because their bandwidth costs go up.
Update: Looks like others have suggested this. http://www.theiphoneblog.com/2009/06/10/sign-3year-att-contr...
Of course, with a new iPhone every year, continuing to follow such a policy could leave some die-hard fans with commitments lasting decades...
The optimum outcome of this would be for phone companies to give up the practice, as it only enrages customers in the long run.
The optimal outcome for them is to use that to get people locked into their service for two years, and give them a device for $0 that a company without a contract would have to ask $200 for. They're not stupid, at some point somebody surely said "hey, what if we sold these phones for a higher price unlocked" but then everybody laughed and that guy felt like an idiot.
I honestly doubt that. I have often heard people say "hey, that phone only costs 10€ with O2, but 100€ with T-Mobile" and stuff like that. It never occurs to them to compare the rates they would get without a phone with the rates they get with the phone.
Probably there are lots of psychological studies about that (similar to the x.99cent prices in supermarkets). But that is why maths is important (among other things) - because it can protect you against the failures of your brain.
Whereas I can go out tomorrow and buy a macbook at the prices Apple advertises during WWDC, the same isn't true for the iphone. Hence the confusion.
Hardly think AT&T is to blame that you can't use features your phone is capable of using in the OS 3.0 update, and therefore should get a subsidized upgrade.
The problem here is that Apple is a company that drives its customers to constantly buy the latest gadget. Cell phone subsidies make the early adopters feel like they're getting shafted, as they are not eligible for the advertised price.
The real solution here is to only subsidize the "average consumer" version of the device, or to avoid subsidy programs that are significantly longer than the time span between different versions of the device. A 2 year subsidy makes no sense if Apple is producing a new phone in less than a year.