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Comment by symesc | Hacker News Reader

I love the approach here: unsubsidized or subsidized, your choice.

fwiw, t-mobile is going that route with all of their phones and plans (called "even more plus"). if you sign up with them and have your own phone (or want to pay for the phone upfront), your monthly plan is less money and you have no contract. you can of course still buy subsidized phones through them for the normal monthly rate and a 2-year contract.

Which kinda makes T-Mobile the only real option if you have an unlocked phone. Why spend all that money on the phone if you're still going to be paying to subsidize something you didn't buy? As long as you're happy with the service, of course.

T-Mobile has constantly been coming out on top as of late, (in regards to customer relations/treatment) but they still don't quite have the network though, do they?

(Currently stuck on AT&T.)

Anecdotal experience with both AT&T and T-mobile in the USA (mostly southwest) says that T-mobile beats AT&T.

I've had the same experience. I'm pretty sure that AT&T is the worst 3G provider in the US.

"T-Mobile, AT&T Push HSPA 7.2-Mbit/s Upgrades"

Granted that this is purely anecodatal, but I have not had any complaints with the T-Mobile network.

TMobile service is great in big cities. When I go home its 1g and Roaming(free). The real nice point is the great prices and excellent customer service. Today I called to see when my upgrade date is and I had a person on the phone and was done in 1 minute.

T-Mobile also has a policy of unlocking subsidized phones at the request of customers in good standing. 90 days? Paid your bills? Just call and ask. Done.

I've used t-mobile since they were called Voicestream. This was in New England, SW Florida, and now DC. Their network doesn't have the penetration of Verizon but I have never had any substantial issues with service. They even recently expanded to provide service in the DC Metro, which was a pleasant surprise.

I have the same plan I've had since the Sidekick II (with modifications for data on newer devices), which I got with a subsidized phone, and then renewed for two years with a subsidized G1. It is about the same as the new "unsubsidized" price for phone+data. If I buy this phone, I will pay about $20 more per month for service and will be locked into paying it for two years. This is still less than the price of the unsubsidized phone, of course, but I am still kinda annoyed that phone service keeps getting more expensive and only gradually getting faster and more widespread, despite all other kinds of tech getting cheaper and faster.

in uk this is the norm for all phones : )

In Italy most phones are sold unsubsidized. It's the exception rather than the rule to see subsidized prices. In Austria, I would say it was about 50/50.

The problem in US isn't subsidization though.

The US problem is stupid carrier exclusivity!

Incredible how country that values freedom so much allows such lock-ins to exist!

The US is pretty weird for mobile stuff. Here in Europe, as far as I know, you basically just pop a different SIM in a phone and everything pretty much works. Also, you don't pay when someone calls you.

Yeah, and you don't pay when someone sms you!

By the way, that's why it was easy for Twitter to provide free sms forwarding in US (first). Operators would easily agree - they'll get the money from recipient.

Sure, though it's worth noting that you could already buy and activate an unlocked phone on most carriers. Most people don't because, well, unlocked phones are expensive and you typically don't get a discount on your service fee for buying one.

The cool thing here is that T-Mobile actually has a decent contract-less post-pay plan.

If only they were selling it at sane unsubsidized prices.

Seems pretty sane to me, compared to other HTC phones' unsubsidized prices.

Unsubsidized phone prices make Oracle licensing look sane. :)

and an unsubsidized, factory unlocked iphone 3gs costs $750-$1000.

where can you get one?

yeah, that's about right price for newer smartphones.

ebay or some random places on the web. they are all imported from hong kong.

Seriously? Parts can't be more than $200 for this. I mean, they sell the iPod Touch for $200 which costs $155 to make ( http://iphonetouch.blorge.com/2007/12/19/ipod-touch-bests-ip... ). Is a GSM radio IC expensive? Hell no. They're in bed with the carriers, and they're even worse than Apple because they're trying to say that they aren't.

Because the software is free right? (Clue: the people who wrote it were full-time Google employees).

Clue: the software for the iPod touch wasn't found in the street either.

Which, umm, is why it also retails for more than its parts cost.

I suppose the question is, why is the iPhone over $500 more than the iPod touch? Is there really that much hardware/software differentiation between the two to justify the increased price?

I suppose the ability to make calls and access data almost anywhere makes it that much more valuable to people, or they would not be able to price it as such.

It's amazing what happens when you price things according to how much people are willing to pay as opposed to how much it cost you to make.

A lot of it probably deals with a plethora of byzantine patents needed to manufacture a mobile phone.

Sure, and this bottle of Coke costs only $0.12 to make. What's your point?

Google's not a charity. The rumors that they were going to sell the phone at a huge loss to gain market share was, frankly, silly.

Seriously? I despise this worn out arguement.

Sure, the parts might cost $155; but you can't do much without knowing how to connect the parts together, and without spending millions on finding the right combination of parts.

And then there's the software on top of that which others have noted.

The parts are the variable cost, software and know how are largely fixed. In a normal market, prices would trend towards the variable cost. The US cell phone market, however, is an oligopoly of large carriers that push the "retails" prices on phones high so they can lock people into contracts by selling the "subsidized" phones. Thus, prices won't trend towards the marginal cost. They'll stay high.

That's a long winded way of saying: if carriers (and handset makers) didn't have a massive chubby for long term contracts, prices on handsets would be much, much lower. The iPod Touch is a good example of that. It's obviously worth Apple selling it for a ~30% margin, assuming the $155 parts cost is correct. What do you suppose the margins on the actual iPhone are?

To be fair you're missing a lot of parts and the ones that they share are a lot more high end on the N1. Twice the CPU, 4x the RAM, over 2x as large a screen, GSM/EDGE/UMTS/HSDPA radios, GPS, compass, still/video camera with flash and autofocus, etc etc.

And on top of all that iSuppli's figure is just an estimate. Considering every phone in the same league as the N1 is in a similar price, there aren't obscene profits being made. If they really cost $150 to make someone somewhere would start selling them for cheaper--we're talking CE here which is defined by brutal price wars. Don't think that HTC would settle for being an OEM when they could own the market by selling devices at 1/3 the price directly.

Completely agree. I'd like to know how much they really need to actually sell these things for. iPod Touches go for, what, $500 less than an unlocked phone? This sucks. I'd love to have a 3G Android phone on ATT as well as my iPhone, just to develop on an try out, but the market makes this impossible.

Is there a reason not to buy a subsidized phone and just eat the termination fee immediately? (I'm assuming it's ~$200, but might be different for smartphones)

IIRC, the termination fee brings you up to the cost of the unsubsidized device.

Ah, thanks for the clarification. I was under the impression that the early termination fee was less than the difference, so that the black market value for an unsubsidized phone would be a good bit better than the official one.

Its actually cheaper than all the other popular smartphones when purchased without a contract:

iPhone 3Gs: $599 Palm Pre: $550 Motorola Droid: $599

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