Phone Discounts vs Lower Monthly Rates

[email protected] wrote:

> Yeah, well the question is how much less. $2? They didn't say. In
> some cases I imagine that is the amount less. Completely offset by
> the contract revenue which is why they do it.

Yes.

But at most, they're sold at just below cost, otherwise Sprint is lying, which
isn't generally a good idea when you're filing papers with the SEC. I like to
think Sprint is smarter than some of the other telecomm outfits that have
gotten spanked by the SEC lately. (Although sometimes I wonder)

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› See More: Phone Discounts vs Lower Monthly Rates

On Thu, 19 May 2005 00:35:19 GMT, Paul Miner <[email protected]>
wrote:

>Maybe the NEW question is "how much less", but the original claim made
>by you was that handsets typically cost ~$15 to $25 or so and
>therefore SPCS is absolutely NOT selling handsets at a loss as most
>everyone believes. Now that you've conceded the first question I
>suppose it's pointless to wait for you to provide facts backing up
>your claims.

Heh. Typical usenet. I never said Sprint paid $15 or $25.

I said that was what it cost to make them in a factory in Mexico or
maybe Korea. Maybe less.

I imagine Sprint has to buy those branded handsets in custom packaging
for a lot more than they cost Motorola to make in Mexico, or Motorola
wouldn't be making them. Probably some are $50 or so- those V180s
look pretty cheap to make. Some are probably more, maybe up to $150.
Sprint sells very few handsets for anything like that.

Now if Motorola were selling us those handsets, and competing with the
Korean and Japanese and Chinese manufacturers the prices would decline
due to competition.

Face it, the rebates and inflated prices are caused by the carriers
keeping the equipment all under control. The "free phone" signs you
see outside every phone store in the country (even the Sprint store)
are not for current customers. Only new ones. Current customers can
just whistle dixie.

"[email protected]" <[email protected]> wrote in message
news:[email protected]...
> On Thu, 19 May 2005 00:35:19 GMT, Paul Miner <[email protected]>
> wrote:
>
> >Maybe the NEW question is "how much less", but the original claim made
> >by you was that handsets typically cost ~$15 to $25 or so and
> >therefore SPCS is absolutely NOT selling handsets at a loss as most
> >everyone believes. Now that you've conceded the first question I
> >suppose it's pointless to wait for you to provide facts backing up
> >your claims.
>
> Heh. Typical usenet. I never said Sprint paid $15 or $25.
>
> I said that was what it cost to make them in a factory in Mexico or
> maybe Korea. Maybe less.

Heh. Typical Usenet. No facts, just opinions.

>
> I imagine Sprint has to buy those branded handsets in custom packaging
> for a lot more than they cost Motorola to make in Mexico, or Motorola
> wouldn't be making them. Probably some are $50 or so- those V180s
> look pretty cheap to make. Some are probably more, maybe up to $150.
> Sprint sells very few handsets for anything like that.

Again, just an opinion. I posted FACTS that indicate that they are sold at
a loss.

>
> Now if Motorola were selling us those handsets, and competing with the
> Korean and Japanese and Chinese manufacturers the prices would decline
> due to competition.

So, you are saying that if they were selling against Sanyo, Samsung or
others there would be a price decline. Wait a minute- they are already are
competing with them. I guess that means that prices have already declined,
according to you.

>
> Face it, the rebates and inflated prices are caused by the carriers
> keeping the equipment all under control.

Where's the proof, Stevie?

>The "free phone" signs you
> see outside every phone store in the country (even the Sprint store)
> are not for current customers. Only new ones. Current customers can
> just whistle dixie.
>

Well, we could always take the approach used by all other countries- no
subsidized phones. None. Zero. Zilch. But, then you would have nothing
to complain about.

On Wed, 18 May 2005 20:27:14 -0600, "SS" <[email protected]>
wrote:

>> Now if Motorola were selling us those handsets, and competing with the
>> Korean and Japanese and Chinese manufacturers the prices would decline
>> due to competition.
>
>So, you are saying that if they were selling against Sanyo, Samsung or
>others there would be a price decline. Wait a minute- they are already are
>competing with them. I guess that means that prices have already declined,
>according to you.

No, they aren't. They only have one customer. Sprint.

So the customer can dictate terms and prices.

Ya know there were no Motorola products at Sprint for a couple of
years. Why would Motorola have let that happen? They only have one
customer for Sprint phones. Sprint had them over a barrel for a
time. Then they made a deal.

Now when Sprint dropped Motorola (which they did) and Motorola could
have sold them to users directly and the users could then have used
them on the Sprint network, would the prices be higher, or would they
be lower? It's obvious. You tell me the answer.

Would you buy a Motorola product for $300 or a Sprint one for $300
with a $150 rebate? But Motorola would then have to compete. They
would be selling those things for $99. Or less.

That is the competition that has been stifled by the carrier being in
control of all the equipment.

Motorola could have tried to sell them directly to users, but would
Sprint PCS activate them? I don't think so.

[email protected] wrote:

> No, they aren't. They only have one customer. Sprint.
> So the customer can dictate terms and prices.

No, they don't, they sell to other carriers too.


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JustThe.net - Apple Valley, CA - http://JustThe.net/ - 888.480.4NET (4638)
Steven J. Sobol, Geek In Charge / [email protected] / PGP: 0xE3AE35ED

"The wisdom of a fool won't set you free"
--New Order, "Bizarre Love Triangle"

"[email protected]" <[email protected]> wrote in message
news:[email protected]...
> On Wed, 18 May 2005 20:27:14 -0600, "SS" <[email protected]>
> wrote:
>
> >> Now if Motorola were selling us those handsets, and competing with the
> >> Korean and Japanese and Chinese manufacturers the prices would decline
> >> due to competition.
> >
> >So, you are saying that if they were selling against Sanyo, Samsung or
> >others there would be a price decline. Wait a minute- they are already
are
> >competing with them. I guess that means that prices have already
declined,
> >according to you.
>
> No, they aren't. They only have one customer. Sprint.

Absolutely incorrect. Motorola sells / sold their phones to all the other
world wide wireless carriers. What's more, the number of Motorola phone
models that were sold to SPCS were insignificant, and there were more
warranty returns on their phones, than any other phone manufacturer.
>
> So the customer can dictate terms and prices.
>
> Ya know there were no Motorola products at Sprint for a couple of
> years. Why would Motorola have let that happen? They only have one
> customer for Sprint phones. Sprint had them over a barrel for a
> time. Then they made a deal.
>
> Now when Sprint dropped Motorola (which they did) and Motorola could
> have sold them to users directly and the users could then have used
> them on the Sprint network, would the prices be higher, or would they
> be lower? It's obvious. You tell me the answer.
>
> Would you buy a Motorola product for $300 or a Sprint one for $300
> with a $150 rebate? But Motorola would then have to compete. They
> would be selling those things for $99. Or less.
>
> That is the competition that has been stifled by the carrier being in
> control of all the equipment.

Only in your mind. As stated, SPCS cancelled their contract with Moto, as
too many customers were returning their phones because of hand set problems.

Bob

PS: One more thing. I remember someone who had the same argument about phone
subsidies 3 or 4 years ago in this and other news groups. At that time, Moto
was showing their list price on their phones on the web, and their sales
price was far higher, than the same handsets offered through SPCS, Verizon,
and the GSM wireless providers.

[email protected] wrote:

>>====================
>>Revenues from sales of handsets and accessories, including new customers
>>and upgrades, were approximately 9.0% of net operating revenues in 2003,
>>10.0% in 2002 and 11.8% in 2001. These declines were mainly due to
>>higher rebates and lower gross additions. As part of the PCS Group's
>>marketing plans, handsets, net of rebates,
>>are usually sold at prices below cost.
>>====================
>>http://www4.sprint.com/03ar/download...3arForm10K.pdf
>>(On page 39.)
>>
>>So there you have it; the smoking gun.
>
>
> Yeah, well the question is how much less. $2? They didn't say.

Now you're just being facetious. Common sense dictates that most users
wouold accept a $2 additional margin, making it pointless to discount a
phone by $2.

On the other hand, we have a very clear reason to beleive that the
subsidy is AT LEAST $150, if not more. This is based on the simple fact
that new signups (and elligible re-signs) get a $150 mardown.



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[email protected] wrote:

>>>Now if Motorola were selling us those handsets, and competing with the
>>>Korean and Japanese and Chinese manufacturers the prices would decline
>>>due to competition.
>>
>>So, you are saying that if they were selling against Sanyo, Samsung or
>>others there would be a price decline. Wait a minute- they are already are
>>competing with them. I guess that means that prices have already declined,
>>according to you.
>
>
> No, they aren't. They only have one customer. Sprint.

so Verizon, T-Mobile, Cingular, Alltel, Western Wireless, and various
other Tier Two and Tier Three operations don't exist, huh?

In fact, the only carrier with a one-one relationsip is Nextel, which
only sells Motorola.

> Ya know there were no Motorola products at Sprint for a couple of
> years. Why would Motorola have let that happen? They only have one
> customer for Sprint phones. Sprint had them over a barrel for a
> time. Then they made a deal.

Sprint had no one over a barrel. Motorola got along just fine selling
iDen phones to Nextel, CDMA phones to Verizon, and GSM phones to
T-Mobile, CIngular and until recently, AT&T.

> Now when Sprint dropped Motorola (which they did) and Motorola could
> have sold them to users directly and the users could then have used
> them on the Sprint network, would the prices be higher, or would they
> be lower? It's obvious. You tell me the answer.

You are operating under the short-sighted and clearly flawed assumption
that Sprint is the only carrier out there. If someone absolutely had to
have a Motorola phone, there were plenty of other carriers to pick from,
and they could have taken their number with them, too. If they were
still under contract, many times selling the old phone on eBay will help
recover the cost of the termination fee.


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Transpose the c's and a's in my e-mail address to reply.

On Wed, 18 May 2005 22:23:03 -0700, Steve Sobol <[email protected]>
wrote:

>[email protected] wrote:
>
>> No, they aren't. They only have one customer. Sprint.
>> So the customer can dictate terms and prices.
>
>No, they don't, they sell to other carriers too.
They have only one customer for sprint phones. Sprint.

"[email protected]" <[email protected]> wrote in message
news:[email protected]...
> On Wed, 18 May 2005 22:23:03 -0700, Steve Sobol <[email protected]>
> wrote:
>
> >[email protected] wrote:
> >
> >> No, they aren't. They only have one customer. Sprint.
> >> So the customer can dictate terms and prices.
> >
> >No, they don't, they sell to other carriers too.
> They have only one customer for sprint phones. Sprint.

Now you are just being silly. Moto sold the same phone models to SPCS,
Verizon & Alltel. The only thing different was the software, which was
programmed for each carrier's needs and possibly the transreceiver, tuned to
1900 or 800.

Bob

[email protected] wrote:
> On Wed, 18 May 2005 22:23:03 -0700, Steve Sobol <[email protected]>
> wrote:
>
>
>>[email protected] wrote:
>>
>>
>>>No, they aren't. They only have one customer. Sprint.
>>>So the customer can dictate terms and prices.
>>
>>No, they don't, they sell to other carriers too.
>
> They have only one customer for sprint phones. Sprint.

I call Bull****.

The V60v sold by Sprint is essentially identical to the V60 models sold by
Verizon, T-Mobile and others. With Sprint-specific firmware, yes; but most
other cellular carriers have the handset manufacturers do custom firmware too.

Plus, Sprint isn't the only company in the market for Sprint phones; there's no
reason Virgin Mobile (or other SPCS resellers, but I chose them because they're
the biggest) couldn't buy the V60v from Moto. Same technology, same network.

--
JustThe.net - Apple Valley, CA - http://JustThe.net/ - 888.480.4NET (4638)
Steven J. Sobol, Geek In Charge / [email protected] / PGP: 0xE3AE35ED

"The wisdom of a fool won't set you free"
--New Order, "Bizarre Love Triangle"

On Thu, 19 May 2005 14:29:36 -0700, Steve Sobol <[email protected]>
wrote:

>> They have only one customer for sprint phones. Sprint.
>
>I call Bull****.
>
>The V60v sold by Sprint is essentially identical to the V60 models sold by
>Verizon, T-Mobile and others. With Sprint-specific firmware, yes; but most
>other cellular carriers have the handset manufacturers do custom firmware too.

The phone manufacturers only sell to carriers. You guys know full
well what I meant.

Wouldn't it be better for competition on equipment if Walmart had a
big selection of phones that could be used on Sprint but that Sprint
didn't have any involvement with?

They'd be having those price rollbacks, like they do on pants and
toaster ovens. Circuit city would be price guaranteeing them, as
would Staples and Office Depot.

As it is you can go nearly anywhere and with a very few exceptions
(Best Buy has 10% off coupons) there is little or no difference in
prices.

As it is the price of those phones is tightly controlled.

A retailer can only buy Sprint phones from Sprint and nowhere else.
A manufacturer can only sell to carriers, not to retailers. Not to
the public. Not to online sellers. The number of customers is very
small. Competition is largely stifled.

"[email protected]" <[email protected]> wrote in message
news:[email protected]...
> On Wed, 18 May 2005 20:27:14 -0600, "SS" <[email protected]>
> wrote:
>
> >> Now if Motorola were selling us those handsets, and competing with the
> >> Korean and Japanese and Chinese manufacturers the prices would decline
> >> due to competition.
> >
> >So, you are saying that if they were selling against Sanyo, Samsung or
> >others there would be a price decline. Wait a minute- they are already
are
> >competing with them. I guess that means that prices have already
declined,
> >according to you.
>
> No, they aren't. They only have one customer. Sprint.

Maybe on your planet, but here in US there are at least 10 carriers with a
million subscribers and with the exception of Nextel, every one of them uses
multiple phone suppliers.

>
> So the customer can dictate terms and prices.

Now you're getting off the subject. You claimed that the carriers were
inflating prices and were proven wrong. Kind of late in the game to try
anddeflect criticism by changing the subject (even though you're wrong
again).

>
> Ya know there were no Motorola products at Sprint for a couple of
> years. Why would Motorola have let that happen? They only have one
> customer for Sprint phones. Sprint had them over a barrel for a
> time. Then they made a deal.

No- they sold the same model phone, with different firmware and a different
name on the cover, to different carriers.

>
> Now when Sprint dropped Motorola (which they did) and Motorola could
> have sold them to users directly and the users could then have used
> them on the Sprint network, would the prices be higher, or would they
> be lower? It's obvious. You tell me the answer.

Simple- Motorola doesn't have the permission from Sprint to simply use their
name on Motorola products. Only those licensed by and authorized for use on
the Sprint network can carry the Sprint name, and there is no legal or
business reason that they have to allow other phones on their network.

You really need to go to a few of the phone makers' sites and check out the
retail prices they have listed for their phones- they make full retail
through Sprint seem like a bargain.

>
> Would you buy a Motorola product for $300 or a Sprint one for $300
> with a $150 rebate? But Motorola would then have to compete. They
> would be selling those things for $99. Or less.

Except as I've already stated, you are assuming that the phone cost less
than $150 to produce. I've already shown that this is not the case. What
would motivate Motorola to sell at a loss when they can recoup their cost
from Sprint and have them write off the loss?

>
> That is the competition that has been stifled by the carrier being in
> control of all the equipment.

Again, go to the websites. Many of the manufacturers do sell phones- for a
hell of a lot more than the carriers. Nothing has been stifled.

>
>

[email protected] wrote:

> A retailer can only buy Sprint phones from Sprint and nowhere else.
> A manufacturer can only sell to carriers, not to retailers. Not to
> the public. Not to online sellers. The number of customers is very
> small. Competition is largely stifled.

I don't believe you're correct. In fact, I'm 99% sure that the carrier's
authorized retail agents buy their own phones. Hm. Think about it - does Virgin
Mobile sell any phone models that Sprint also sells? Sprint has to approve them
for use on the SPCS network. But Sprint doesn't sell most of them themselves.

Some big nationwide chains only sell the same models the carriers do. However,
I know of smaller retail agents who sell models the carriers don't.

I really think you ought to give it a rest.

--
JustThe.net - Apple Valley, CA - http://JustThe.net/ - 888.480.4NET (4638)
Steven J. Sobol, Geek In Charge / [email protected] / PGP: 0xE3AE35ED

"The wisdom of a fool won't set you free"
--New Order, "Bizarre Love Triangle"