Economy be damned! Carriers must be struggling more than their customers since some are considering no longer footing the tab for you to have your next new shiny device on their networks. Towards the end of last year, T-Mobile shocked the industry by announcing they are looking to scrap the popular marketing strategy of carrier subsidies. What does that mean? Well, remember when the $199 price tag on that iPhone didn't seem so bad? With an end to subsidies, you'll be paying FULL price for that device. Yep. A 16GB iPhone 5 could run you $649.
Now while some smaller carriers who offer pre-paid service have always operated this way, not subsidizing your phone, T-Mobile is one of the first of the larger carriers to say they are doing away with the practice all together. The upside? In exchange for the sticker shock, T-Mobile says it will provide lower monthly plans. However, you will have the option of one of its "Value" plans that lets you finance your device. Basically, you'll be able to spread the cost of the device over a number of months by paying extra on your bill.
Most Americans are already feeling the effects in their wallets from payroll tax increases that kicked in this year, not to mention, other cost of living expenses. With a bit less disposable income, they've got to figure out if upgrading everyone on the family plan is going to be friendly to their personal economies. While some may argue this is the best way to own your phone, and not be tied to long term contracts with carriers, you have to wonder what the impact to smartphone sales will be if other big carriers follow suit. Verizon's chief Exec seems to think it's a great idea, and AT&T is waiting to see how things pan out for T-Mobile.
Are you willing to pay more upfront for lower monthly fees? Do you think this move will improve or be detrimental to the industry and smartphone sales?
Posts
