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Comment by badusername | Hacker News Reader

It's interesting how the dynamics work these days, and how Amazon just doesn't seem to be getting it. People are perfectly happy to sign a 2-year contract on a well-designed fully-rounded functional phone, they do that by the tens of millions. They even pay $200 to get the phone. The phone has become personal, and also a necessity as you go through the day. Going through 2 years on a badly designed phone just because somebody gave it to you for free doesn't really makes sense anymore.

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This may seem weird in Silicon Valley, but even in the US, a lot of people don't have $200 to pay for a phone.

Then they probably don't have enough money for a subscription service, and if they do, they're better off with a non-smart (dumb?) phone.

The term you're looking for is "feature phone"

http://en.wikipedia.org/wiki/Feature_phone

Spot on. Thanks

There are some subscription services that are quite affordable and not having a cell phone in the modern world is not really an option.

You need to compare "quite affordable" with the $200 price of a smart phone. Because $200 seems "quite affordable" for a smart phone that can do pretty much anything and everything. And I never suggested not having a cell phone.

> not having a cell phone in the modern world is not really an option

Er, what? Less convenient to be sure, but not having a cell phone is fine...

Price point does matter. There is a big market for the $0 phones (its what pushed apple to offer a budget iphone).

I think badusername's point was that price is a secondary determinant for people. The $200 phones everyone wants but not everyone can afford sell very well once they drop down to $0. However, the $200 phones no one wants sell just as well at $0.

There is even a huge market for $500 phones. But when you slash the price of your $200 phone to $.99 it's not a good sign.

Imagine Apple dropping the price of the iphone below the BOM, that would send their stock reeling.

Sure, there will always be some people who can afford a $200 phone, and others that can't. But for those who can, I'm amazed at how much emphasis is placed on the upfront cost of the phone itself, versus the total cost over the 2 years of a normal contract. Lets just pick easy numbers and say your monthly bill is $100, which is probably on the low end, but it still illustrates my point. Over two years, you're going to pay $2400 for the service. $200 vs $400 vs $600 is the wrong comparison to be making, because it's less than 20% of the total cost.

That's why these marketing promotions really feel scummy to me. "Buy Mom a smartphone for Christmas" is actually "Show Mom how much you love her with a two year, $2500 financial obligation".

Part of the reason these people don't have $200 to pay for a phone is because they don't think about lifecycle costs of purchases in general.

Maybe for those people, someone should design a plan in which you cash for signing to a low cost plan for a higher price?

Since Amazon is positioning this phone as a conduit from which to sell additional products from Amazon, they probably don't want consumers that can't afford the $200 phone.

But then they have $100/month to pay for the plan? It's not like subsidized phone plans in the US are cheap.

Yes, but with a lot of people living paycheck to paycheck, it's easier to rationalize costs that are not immediate.

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