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.
The new Ikea Catalog is making a big bet on very small living spaces — the kind of place that costs more than half your monthly salary but is too small for a dinner-table, let alone a separate room for your kids, who are supposed to sleep in a bunk-bed in the living room (“Why […]
8Bitdo’s prototype Desktop Arcade Joy Stick is a) an entire retrogame cabinet, complete with controls, display and guts, b) excellently crafted from wood, c) a surprisingly beautiful re-contextualizing of the experience of play. I’d like to own an entire arcadeful of these, in sizes ranging from 6 inches to 6 feet tall, in a colossal […]
Zippo went a bit crazy with its lighter colors, introducing a rainbow of material-science wonders that, alas, I have no more use for, being a 15-year ex-smoker with the muscle-memory of an entire repertoire of obsolete Zippo tricks.
While Netflix and Hulu have seemingly dominated the streaming market with their limited selections, we’ve looked a little outside the box and found something pretty great as an alternative. SelectTV combines all the content of cable with the convenience of streaming, and it’s affordable too.SelectTV is an online subscription service that packs an impressive library of over […]
These days, the vape market is saturated with low-quality products, making it nearly impossible to separate the gems from the duds. The Atmos Rx Dry Herb Vaporizer stands out from crowd for two reasons: its impressive battery life and durable construction. This high-end little gadget is compact enough to fit in your pocket, and packs a powerful punch, […]
If you’re like us, you occasionally get ambitious with your dinner and try to cook multiple sides plus a main dish. These efforts usually end as a cold meal plus a pile of dishes to wash. MasterPan Multi-Sectional Meal Skillet makes it super easy to make multiple dishes at once without the hassle. This heavy gauge bottom pan […]