Saul Hansell suggests that hated U.S. cellular carrier practices such as text message markups and fee-packed contracts
ultimately give American consumers what they really
want: predictable bills.
In pursuit of this we learn of the psychological "nuances" of pricing and the "supersized logic" of using fat overage fees to upsell customers to expensive all-you-can-eat plans.
"This year," he writes, "the deals are becoming even better."
His piece even claims that the industry would love to give up the adhesive contracts, early termination fees and locked-in subsidy handsets that it won't give up, even when threatened by congress
Now all the carriers are selling heavily subsidized smartphones. They hate this state of affairs -- and wish that American consumers would just pay full price for the phones, the way people do in Europe.
Hansell's evidence for this is the iPhone, which was "unsubsidized" when it was $600. It only dropped to $400 and then $200, he writes, when they moved to subsidies. He implies that the iPhone launch was initially unsuccessful and that this shows Americans won't buy contract-free phones: "Consumers balked at the high upfront cost. By the second generation of the iPhone, Apple reverted to a traditional subsidy model."
For customers, however, the only practical option with the $600 U.S. iPhone was to activate it on the standard subsidy-payoff contract, with a compulsory data plan to boot. Whatever the unsubsidized payment arrangements between Apple and AT&T, the contract arrangements between AT&T and consumers always
assumed a subsidy. In fact, my recollection is that AT&T itself wouldn't even sell you that "unsubsidized" iPhone without activating a 2-year contract on the spot. Buying one from the Apple store did not enforce activation, but everyday customers couldn't activate on other carriers (or on a pre-paid AT&T plan) without using warranty-busting hacks that emerged only later.
In fact, AT&T didn't market a no-contract iPhone until March, 2009
-- for $600-$700 depending on model, more than the original iPhone model ever cost "full price."
Throughout his piece, Hansell writes often of people's confusion. He claims that even economists find cellphone plans baffling. But they're not hard to understand except in the nickel-and-dime details. Hansell's repeated evocation of "confusion" is reminiscent of when characters in novels continually ask what's going on, or when they wake up in white rooms: it's because the writer himself doesn't know.
Excepting the Yale professor whose words introduce the article, the people quoted in it are carrier flacks and cellular industry analysts: a fair sign of a piece tossed off inside a snowglobe of PR.
This week on Cool Tools’ Maker Update: Kitty Grabs Gold, a beer cooler that follows you, the Circuit Playground Express, Adafruit and Microsoft, Other Machine Co. and Bre Pettis, Tinkercad Lego export, a great kit for gadget and toy hacking, and Maker Faires. Our featured Cool Tool is the iFixit Electronics Tool Kit. Check out […]
The mechanical Royal Kludge keyboard (Update: in stock here) seems to do well with Amazon reviewers, but there are no guarantees you’ll receive one with the coveted OFF/NO switch.
Microsoft announced Tuesday a long-awaited upgrade to its Surface Pro series of high-end tablet PCs, dropping the number from the name and adding Kaby Lake processors, more minutes on a charge and a few dollars to the price tag. Here’s Mark Hachman, Senior Editor at PCWorld: For Surface Pro 4 owners, the new Surface Pro […]
Boasting an IPX6 waterproof rating, the Trakk Bullet Ultra Compact Waterproof Bluetooth Speaker resists dust and heavy rainfall. It’s currently available in the Boing Boing Store.The Trakk Bullet offers the same wireless convenience as other portable speakers, but few are built as tough as this one. Its utilitarian construction is designed to be a totally low-maintenance […]
The Ticwatch 2 Active Smartwatch is a simpler take on an active wearable that raised over $2m dollars on Kickstarter and is currently offered in the Boing Boing Store.Somewhere in between the single-day battery life and platform-specificity of the Apple Watch and Android Wear devices, there exists the Ticwatch. Instead of trying to shoehorn another […]
Loot Crate is a subscription service that delivers a box of curated pop culture goods to your doorstep. To sample their geeky wares, you can order a single mystery box exclusively from the Boing Boing Store.Each month Loot Crate sends you 6-7 unique items and apparel, including collectibles, books, and t-shirts. Pulling inspiration from all […]