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Thursday November 30, 2006
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Over on the comments thread for my post about the new ruling allowing you to unlock GSM phones, there's an interesting meme developing. I'm hoping you, the brave and global Gearlog readers, can help give evidence or shoot it down.
It's conventional wisdom in the cell phone world that the way wireless carriers keep their grips on the US market is by keeping consumers addicted to subsidies. Americans want their "free" phones, so they're willing to put up with any sort of abuse from carriers in exchange for marking the real cost of a phone down by $150-250. While you can buy unlocked, carrier-free phones here in the US -- from nokiausa.com, for instance -- they're not popular because they can't compete on price with the carrier-subsidized versions. In other words, US shoppers are very willing to give up freedom and flexibility to get a lower price.
Some commenters say this is all a conspiracy; that US carriers are artificially marking up retail prices to make it look like phones are only affordable with subsidies. So here's my challenge: show me the evidence. Show me prices of the same phones as sold in the US (or comparable models), sold unlocked through legitimate channels in countries of comparative average annual per capita income (i.e. no Asian countries where the average person makes $3,000/year), for considerably less. My investigation continues after the jump.
The results I found don't support the conspiracy theory. I compared phones from Nokia's and Sony Ericsson's Web sites and found this:
Nokia E70 smartphone: $449.99 unlocked in USA; UKP 319 ($622) unlocked in UK
Nokia 6103 featurephone: $199.99 unlocked in USA; 899 pesos ($292) unlocked in Argentina
Sony Ericsson W810 musicphone: $449 unlocked in USA; UKP 239 ($466) unlocked in UK
Sony Ericsson W300 featurephone: $249 unlocked in USA; UKP $149 ($290) unlocked in UK
To see the effect of carrier subsidies - the 6103 and W300 are both regularly free with two-year contracts, and the W810 is $149 with a two-year Cingular contract.
If these numbers hold up, sorry, America, you have no one but yourselves to blame for your addiction to carrier subsidies that keeps you in thrall to Cingular and co.
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November 30, 2006 11:49 AM
your price comparisons are informative, but comparing US prices against UK prices may not be the best approach. UK prices are held high by a number of government policies which bury the consumer with both obvious and hidden price increases.
any info from Korea, Singapore, Israel ? Very heavy cellular users and pricing may be more realistic.
December 1, 2006 9:14 AM
Why would the comparisons have to be on a per capita basis? Whoever is selling the phones in those lower per capita countries are still making money aren't they? I would rather pay at least somewhere in the middle between what we whave to pay in the US for an unlocked phone and what they pay in they Asian countries. It's ridiculous that I could import a phone cheaper than buy and unlock a phone here in the US or suffer by unlocking a phone once I've committed to a contract and pay a penalty if I break the contract early. Just silliness. I hate going in debt just to leave my two cents.
December 1, 2006 10:52 AM
Brent, because all costs are dramataically lower in countries with lower per capita income. The sales people could be working for 86 cents an hour; rent on stores could cost $100/month; ad campaigns, packaging, tech support, taxes, regulations, even Web hosting ... everything's cheaper. I don't think any of us would be willing to make Mainland Chinese wages in exchange for paying Chinese prices for goods. So the way to find out if we're really being gouged in the US is to compare our prices to other countries where labor, land, and taxes/regulations are of comparable price.
Martin, good point. I'd take comparisons from South Korea or Israel. The problem is, I can't read Korean or Israeli Web sites; I only read English, Spanish and French. That's why I'm asking for help from you guys.
February 1, 2007 1:14 PM
i thought this was totally wack
who would like kill themselves and why would they blame it on a cell phone.
who would even think of this type of subject to write about, ill tell you who a total wack job thats who!