Earlier this year T-Mobile announced they would be doing away with smart phone subsidies while also getting rid of those long pesky contracts. Instead, to help with the high cost of smart phones they basically give you a small loan that you pay back each month to pay for the phone.
Interesting idea, but not thinking that I like it. Verizon has been talking about doing the same and if they do, rest assured that AT&T will follow suit.
Let’s face it. Subsidies that cell phone providers are paying to get you to ink that 2 year contract and get your new iPhone or Android for around $200 is taking its toll on the providers. They have to cover the other $400 for the device so they don’t even make money on you the first year! Yes, smart phones cost a LOT of money.
Some don’t like the long contracts and get all bent out of shape with it. Me, I really have no problem because I’m going to always have a cell phone and I find a program and provider that I like, why would I leave anytime soon? In exchange you pay $400 of my new phone, I’m in! The idea that I now will have to pay the full $600 is one I don’t like at all.
That means every 2 years when I would be eligible for a full upgrade to a new smartphone at the discount price, I now have to fork over another $600… And I guarantee I’ll be with the same provider still…
What it’s going to do is mean myself and many others won’t be upgrading their phones unless it’s really necessary. Maybe the cell phone providers will make more money, but the device manufacturers will make less and the consumers won’t have the latest and greatest.
Is it such a bad thing? I’m not sure. I do know that paying $80 a month per phone is crazy for service and I know I won’t be paying $600 for a smart phone. I’d rather go back to a phone that just does calls and texts, pay less a month, and oh yea…get that “low tech” phone for free to boot. Afterall, I still have my iPad to do all the internet stuff.