Verizon Eliminates Contracts and Device Subsidies
by Brandon Chester on August 7, 2015 2:58 PM EST
North America has always had a fairly unique pricing structure for buying mobile devices. In many places, the concept of purchasing a device for a heavy subsidy and committing to stay with a given carrier for two or three years is unheard of, but in the United States and Canada it has always been the norm. However, that dynamic has been changing as it has become more difficult for operators to subsidize expensive smartphones for the wide market of consumers. Both T-Mobile and AT&T have moved away from the original model of contracts and subsidies in favor of installment plans or simply selling devices at full price, and today Verizon announced that they will follow in their footsteps.
With Verizon's new plans, there are no more contracts and no more device subsidies. Instead, consumers pay for their phones, pay for a bucket of data, and then pay a fee for each device that they add onto the account. The base monthly data fees are 1GB for $30, 3GB for $45, 6GB for $60, and 12GB for $80. On top of the data bucket fee, users will pay $20 to add a smartphone to the account, $10 for a tablet/data stick, and $5 for a smartwatch with cellular capabilities. Additional data over the limit will cost $15 per gigabyte,
As for existing consumers, Verizon will apparently offer avenues for them to get another subsidized device when they transition to these new plans, and they can also hold onto their older plans if they desire. Verizon customers interested in the new plans can switch over when they go live on August 13.
Source: Re/code
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Impulses - Saturday, August 8, 2015 - link
They won't realize it, they haven't done so on AT&T what makes you think VZW following suit changes anything? They're pretty good at selling people on the idea of paying X amount a month for a phone...khanikun - Monday, August 10, 2015 - link
Yes, phones are way overpriced. I mean, when you look at a similar spec tablet, it's like 1/2 the price. All that extra money for what? A cellphone antenna?SunLord - Sunday, August 9, 2015 - link
One has a stupid small battery combined with a draining high resolution 1440p screen and a qualcomm 810 and the other doesn't?I'm waiting for a new Nexus 5 personally but only if it's priced the same as the last Nexus 5 and doesn't trade battery or pointless gimmicky super thinness .
ScorpionRaY - Friday, August 7, 2015 - link
In China there is no subsidy but Apple and Samsung still dominates.DanNeely - Friday, August 7, 2015 - link
The most recent quarter reported had the top two sales slots in China held by local companies.name99 - Friday, August 7, 2015 - link
Apple dominates the profitable segment in China, like elsewhere, and that's all they care about.Samsung is the one for whom the local companies are a problem, especially since there's no obvious advantage to buying Samsung over Xiaomi.
dsumanik - Friday, August 7, 2015 - link
pfff... blatant viral marketing account, or OP's secondary account...lame attempt to manipulate stock/prove invalid point much?Lemme guess you have ccounts with name98, name97...
steven75 - Friday, August 7, 2015 - link
Given that AT&T already did this switch long ago we already know what happens: The carrier still offers a way to buy the latest devices for about $200 up front, then you pay a per month installment. The mix of high end devices was completely unaffected because it appears to the repeat, average customer that nothing much has changed!Where customers get royally screwed is buying the cheaper phones like the Moto G using this same installment plan. They just see "Moto G: $150, Galaxy S5: $200." They don't notice that the MSRP is wildly different and the carrier pockets the difference.
kaidenshi - Friday, August 7, 2015 - link
"They just see "Moto G: $150, Galaxy S5: $200." They don't notice that the MSRP is wildly different and the carrier pockets the difference."Are you sure about that? Everywhere I've seen the Moto G for $150, it's buying the phone outright with no payment plan. I've also seen it for $0 up front which means it's either tied to a contract or a payment plan. But you can go on Amazon and buy it unlocked for $150 all day long.
OCedHrt - Tuesday, August 11, 2015 - link
Yeah I think he got it backwards. The cheap phone buyers finally don't get screwed by having the to continuously pay subsidies. This is all thanks to T-Mobile forcing the change.