
Originally Posted by
smsgator
You miss the point.
On the Verizon network, you can pay $649 for an iPhone plus $1254 for 24 months of service with unlimited voice, unlimited messaging, and 1GB of data per month, for a total of $1903 (using Verizon MVNO Pageplus). Or you could pay $200 for the phone, plus $110/month for 900 minutes, unlimited texts, and 300MB per month for a total of $2840 for 24 months on Verizon proper. Of course if you're not a heavy data user you could pay only $1332 for 1200 minutes, 3000 texts, and 100MB of data per month on Pageplus.
On AT&T you can pay $199 for the iPhone plus $2424 for a total of $2623 for 900 voice minutes, unlimited texts, and 200 MB of data per month for 24 months, or you can pay $649 + $998 for a total of $1647 on Straight Talk for unlimited voice, texts, and data. Of course you could pay $2983 on AT&T if you chose 2GB of data rather than 200MB.
The reason the postpaid carriers continue to add subscribers is that the whole idea of paying $649 for a handset, all at once, is unpalatable for to so many people. Yet paying an extra $668 per year in monthly charges is just fine. There's nothing wrong with this of course, and there are reasons people choose to pay more. 1. Some people simply don't care about spending an extra $56 per month. 2. Some want to use their phone internationally without the bother of getting a local SIM card (and of course on AT&T they won't even unlock an iPhone that's still under contract, though Verizon and Sprint have no problem doing so). 3. Many people are simply unaware that there are ways to spend much less. 4. Some people are bad at math.
Pricing theory dictates this whole system. You want to sell your product at the maximum price to those that are not price-sensitive, but since the supply of the product is essentially unlimited you also want to sell your product at a lower price to those unwilling to pay the higher price. There would be no MVNOs at all if the carriers did not want to sell essentially the same product at wildly different price points.
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