Sprint, the "unlimited data war" and consumer ill-will

[aneftp]

Smartphone prices are determined by market forces.

Nokia's high end N series phones were routinely $700 and no one complained.

People thought the 2007 original iPhone at $499/599 was a "steal" and when apple reduced the price to $399 it was a bargain.

[larryt510]

Yet the top of the line phone is still around $600-700. The bottom drops, the top not so much.

I guess if you factor in inflation over the years that prices on top of the line phones have dropped. $600-$700 12 years ago is probably more like $500-$600 in today's money.

[NGeorge]

If you are not happy that smartphone pricing hasn't dropped as you might want, you should probably be more upset that wireless data pricing hasn't dropped at all, on an ARPU basis. Just like cable TV service costs, its all spiralling upwards out of control... I predict people will just say NO at some point -- many are to cable TV now...

I think this is more in line with my original argument--data prices have not went down--they have went UP. True, we use a LOT more data than we used to--but bandwidth is a TON cheaper than it used to be. As I said, I paid $14.99 for unlimited 56k data--and could tether. True, as smartphones have gotten more popular, the networks have to be managed, and someone has to pay for this--but I could see it being more in the range of $30-35 today for unlimited data with tethering (and maybe throttling it once you hit 25 gigs or something) -- I wonder what the stats are for available bandwidth vs. average data speeds vs. amount of data consumed? Would it be cheaper now for Sprint to provide my laptop 5 days worth of nonstop downloading at EV-DO speeds today than it would have been for 5 days of nonstop downloading at 56k in 1999?

Actually the BEST example of pure greed I can think of is text messaging: Back when the carriers were trying to promote text messaging, and inter-carrier messaging wasn't quite perfected, they were more than happy to include unlimited messages in that $14.99 (hell I held onto that data plan until I left Qwest) or $5 for unlimited messages without a data plan. Then Sprint gave it to me even better: $10 for unlimited data and Unlimited "Shortmail" which turned into Unlimited SMS around 2004 and stayed that way. Once the kids jumped on texting, and it became a "Mom I **HAVE** to have it!!!" item, the carriers started capping the number of messages and it became a premium item when the 200/500/1000 and per-message plans started getting crazy, and Verizon using it as a marketing tool with their "IN network". It costs NEXT TO NOTHING for the carriers to provide text messaging and should be nothing more than a value-add to the data plan. I'm starting to see it swing this way again--but not because it is cheap and a value-add: more because they have successfully positioned it as a "premium item", and can jack up the prices of their data plans by including it. $40 for 4 gigs of data and unlimited messages, or $20 for just the messages?

As to Larry's point about "high end" phone technology being cheaper, I tend to think about it the way he does... I remember most "popular" high-end devices available at the time (that the carriers provided) being in the $200 range, and being able to buy the phones at the discounted price any time as long as I "extended my contract" (no "upgrade eligibility" junk). Comparing the "popular, high end devices sold by carriers" (which were high-end dumbphones) they most definitely were cheaper. ...and for the few that weren't, there weren't all these insanely expensive tack-ons that were tied to the device. The fact that you bought the phone entitled you to the service!

Great example: I wanted a Nokia 8890 **BAD** Had I spent the $400 with a new contract on the brand new Cingular network in Seattle with crappy coverage circa ~2000, I could have had it--on the same plan as someone with a StarTac or a Nokia 5185. I couldn't justify the crappy GSM coverage then, but I got my hands on a device in 2001 that, for about 6 months, had as much status as holding an Iphone in the first six months it was out: One of the first blue Motorola V60's the second Qwest Wireless got their first shipment. I got more complements from that thing than ANY phone I have ever had since.... and it didn't require a new plan, tack-ons, or anything else--but it cost me $400 which I thought was a LOT.

As previously mentioned, there were high end devices in the $800+ range available that were marketed to businesses or rich people back then, just as there are today. The difference is that the early smartphones were in the "specialty business" category where expensive Symbol devices are today--average consumers don't buy those... businesses do. Now smartphones are popular, and are becoming just "the phone". Maybe in 2004 you could segment the market when a Treo could fetch $600 and do a TON more than every other device... but in 2012, if the smartphone has 80% of the market, and continues to grow (the whole "dumbphone" category will probably be gone in 5 years anyway), the whole category becomes just "the phone" and the prices technically should drop considerably--and Larry's point becomes completely valid (the popularly available high-end "phone" in 1999 was cheaper than a high-end "phone" today)--You can't compare a smartphone in 1999-2002 to a smartphone in 2012: They weren't mass consumer items, and weren't highly marketed by carriers (Sprint was one of the first, and was one of the reasons I moved to them way back when).

[NGeorge]

I guess if you factor in inflation over the years that prices on top of the line phones have dropped. $600-$700 12 years ago is probably more like $500-$600 in today's money.

Actually wouldn't it be the opposite? $700 12 years ago is probably more like $850 today.

--nat

[larryt510]

As previously mentioned, there were high end devices in the $800+ range available that were marketed to businesses or rich people back then, just as there are today. The difference is that the early smartphones were in the "specialty business" category where expensive Symbol devices are today--average consumers don't buy those... businesses do. Now smartphones are popular, and are becoming just "the phone". Maybe in 2004 you could segment the market when a Treo could fetch $600 and do a TON more than every other device... but in 2012, if the smartphone has 80% of the market, and continues to grow (the whole "dumbphone" category will probably be gone in 5 years anyway), the whole category becomes just "the phone" and the prices technically should drop considerably--and Larry's point becomes completely valid (the popularly available high-end "phone" in 1999 was cheaper than a high-end "phone" today)--You can't compare a smartphone in 1999-2002 to a smartphone in 2012: They weren't mass consumer items, and weren't highly marketed by carriers (Sprint was one of the first, and was one of the reasons I moved to them way back when).

I completely agree. It's all about comparing the mainstream popular phone from back then with the mainstream popular phone from today. If we were paying $175 for a mainstream popular phone back then we really should be paying the same today or even less. But instead the wireless industry decided to skyrocket the prices as well as the cost to use the devices. It was much cheaper back then and you could buy a new phone at any time without having to renew and there was no lame upgrade eligibility program then. I still think that wireless devices should at least somewhat have followed the trend of all other electronics dropped in price. The original 1980's brick cell phones started out at over $1000. By the late 90's the price of a wireless phones was less than $200. So from the 80's to late 90's prices did drop substantially like all electronics. But not since then.

[Sam73065]

I completely agree. It's all about comparing the mainstream popular phone from back then with the mainstream popular phone from today. If we were paying $175 for a mainstream popular phone back then we really should be paying the same today or even less. But instead the wireless industry decided to skyrocket the prices as well as the cost to use the devices. It was much cheaper back then and you could buy a new phone at any time without having to renew and there was no lame upgrade eligibility program then. I still think that wireless devices should at least somewhat have followed the trend of all other electronics dropped in price. The original 1980's brick cell phones started out at over $1000. By the late 90's the price of a wireless phones was less than $200. So from the 80's to late 90's prices did drop substantially like all electronics. But not since then.

We are definitely being held hostage by the wireless industry and phone manufacturers. You are pretty much stuck buying a phone from the company or authorized retailers and thanks to the subsidy model, the phone prices are kept artificially high.

[larryt510]

and thanks to the subsidy model, the phone prices are kept artificially high.

That's exactly it. They are kept artificially high and are not allowed to decline in prices like all other electronics. The latest trend of smartphones started in 2007-2008. The iphone and then the android phones. I can understand the prices being high when they first came out but in the past 4-5 years retail prices should have been cut in half by now as technology evolves quickly and cost of production goes down as well. A basic Android phone should be about $200-$250 retail now. Not $400

[NGeorge]

We are definitely being held hostage by the wireless industry and phone manufacturers. You are pretty much stuck buying a phone from the company or authorized retailers and thanks to the subsidy model, the phone prices are kept artificially high.

I will say I found a glimmer of hope while in Target--a no-contract Android smartphone for $129.99 ...the ZTE Score X500 from Cricket:

http://www.mycricket.com/cell-phones...zte_score_x500

Lo and behold, it's even on sale for only $69.99 online.

I also noticed the Samsung Vitality for $199.99, on sale for $99.99 online.
http://www.mycricket.com/cell-phones..._vitality_r720

Granted, it's Cricket--and I'm not sure if this is because Cricket is just damn desperate or what -- but it proves exactly what we are talking about: A basic smartphone can be made and sold for a reasonable price without a contract.

SO, if Cricket can do this with a crappy ZTE device (and presumably make their money back)--and even a device from *Samsung*, the major carriers with their relationships and market scale should be able to do the exact same thing -- and offer their better service (and charge the higher prices that goes along with it) while offering basic, medium and high-end smartphones at reasonable prices (12 years ago I seem to remember the low end sitting right around that $69.99 point--which would mean that ZTE or Samsung today, with the high end around $299 which would mean Galaxy Nexus/HTC One today), from the mainstream manufacturers, without the "upgrade eligibility" garbage and tack-ons--just like they did 10 years ago.

I think the problem started with the combination of "added value" and "free"--two things we love in America. The whole upgrade thing started when they started giving you that option of kicking any entry point under $150 down to $0 if you signed a contract--BUT then they added the eligibility: "I like FREE--so why get it for FREE again in 2 years?"
...works fine if you want a basic phone... but then they segmented the market with "smart phones"--you get added value of a phone AND a PDA--so it won't be FREE--but if you wait the 2 years, we'll still give you $150 off. Since it became a new segment, they were free to set the prices as high as they wanted.

Only problem is that it is really no longer a segment--and basically they successfully pushed up the price of "phones" since that is what "smartphones" are seen as now--but we'll see how long it lasts.

I think what Cricket is doing is a good thing--now they just need to get a stock of 3G-only Samsung Galaxy (first gen) devices and put a reasonable price on them. They are going on 2 years old, but much like the Epic I use every day, more than capable--and I bet that would really shake things up

--Nat

[jarrodpd]

While Sprint does not put a cap on the amount you can use, their poor backhaul in many places is the equivalent of throttling that is employed by T-Mobile. It would be like the water company saying you can have as much as you want and then sending it to you with an eye dropper. Since I can usually get between 200K-300K down with their service when I deign to use it, which is almost never, it might as well have a 200MB or 500MB cap because I would be hard pressed to ever use that much. When I did use the 3G service on my iPhone, I maxed out at about 193MB in one cycle though I was hardly able to do anything and I am not even sure what that 193MB was. I had about 3GB of WiFi usage recorded in the same period and my last billing period which ended last night shows 0KB for 3G data and 2.5GB for WiFi. I have not turned the iPhone's 3G radio on at all in the past 90 days. Battery life is great BTW and Sprint even quotes Apple in saying "...if you frequently use your iPhone to browse the web, battery life may be improved by using Wi-Fi instead of cellular data networks" (http://www.apple.com/batteries/iphone.html).

You must not be a big data user. My iPhone on edge I hit 2+ gigs among on. I have T-Mobile btw.

[larryt510]

(12 years ago I seem to remember the low end sitting right around that $69.99 point--which would mean that ZTE or Samsung today, with the high end around $299 which would mean Galaxy Nexus/HTC One today), from the mainstream manufacturers, without the "upgrade eligibility" garbage and tack-ons--just like they did 10 years ago.

Right. Low end was $69.99 (Qualcomm/Kyocera type) and I think the high end was more like $199 (Samsung SCH-8500 or Star Tac). Maybe there was something for $299 (Motorola Vader?). I do remember buying a Kyocera 2255 in 2001 for only $69.99 and no contract at Circuit City.

[Sam73065]

I will say I found a glimmer of hope while in Target--a no-contract Android smartphone for $129.99 ...the ZTE Score X500 from Cricket:

http://www.mycricket.com/cell-phones...zte_score_x500

Lo and behold, it's even on sale for only $69.99 online.

I also noticed the Samsung Vitality for $199.99, on sale for $99.99 online.
http://www.mycricket.com/cell-phones..._vitality_r720

Granted, it's Cricket--and I'm not sure if this is because Cricket is just damn desperate or what -- but it proves exactly what we are talking about: A basic smartphone can be made and sold for a reasonable price without a contract.

SO, if Cricket can do this with a crappy ZTE device (and presumably make their money back)--and even a device from *Samsung*, the major carriers with their relationships and market scale should be able to do the exact same thing -- and offer their better service (and charge the higher prices that goes along with it) while offering basic, medium and high-end smartphones at reasonable prices (12 years ago I seem to remember the low end sitting right around that $69.99 point--which would mean that ZTE or Samsung today, with the high end around $299 which would mean Galaxy Nexus/HTC One today), from the mainstream manufacturers, without the "upgrade eligibility" garbage and tack-ons--just like they did 10 years ago.

I think the problem started with the combination of "added value" and "free"--two things we love in America. The whole upgrade thing started when they started giving you that option of kicking any entry point under $150 down to $0 if you signed a contract--BUT then they added the eligibility: "I like FREE--so why get it for FREE again in 2 years?"
...works fine if you want a basic phone... but then they segmented the market with "smart phones"--you get added value of a phone AND a PDA--so it won't be FREE--but if you wait the 2 years, we'll still give you $150 off. Since it became a new segment, they were free to set the prices as high as they wanted.

Only problem is that it is really no longer a segment--and basically they successfully pushed up the price of "phones" since that is what "smartphones" are seen as now--but we'll see how long it lasts.

I think what Cricket is doing is a good thing--now they just need to get a stock of 3G-only Samsung Galaxy (first gen) devices and put a reasonable price on them. They are going on 2 years old, but much like the Epic I use every day, more than capable--and I bet that would really shake things up

--Nat

That's the problem Nat, Verizon makes the carriers jump through hoops and keeps the "retail" price artificially high, making the customer accept the subsidy pricing and contract. Even worse the consumer is grateful instead of angry.

[NGeorge]

Right. Low end was $69.99 (Qualcomm/Kyocera type) and I think the high end was more like $199 (Samsung SCH-8500 or Star Tac). Maybe there was something for $299 (Motorola Vader?). I do remember buying a Kyocera 2255 in 2001 for only $69.99 and no contract at Circuit City.

I remember quite well I paid $249 for my StarTac back then since I was 15 at the time and that was *ultra cool*--my parents saw no use for cell phones at the time so the deal was I had to pay for my phone & service (which is how my cell phone addiction started on Qwest Wireless... they were great and let me get service in my own name & then completely broke it off my parent's landline account after a year of on-time payments)--the 4 other people in my class with phones all had Nokia 51xx's lol.

The $299 range was the Vader's for sure, the ultra-thin Sanyo that Sprint had (the model escapes me but it was THIN for the time), as well as devices in the class of the Mitsubishi T250: The HUGE screen TDMA phone that AT&T Blue had that used a weird data technology called CDPD that had VERY limited coverage and was supposed to bring data to TDMA (they forgot about the HORRIBLE voice quality and handoff situation)

I'm generally pretty loyal when it comes to companies that show decent customer service--and probably would have stayed with Qwest til the end (probably would have ended up on Verizon by now) -- except when I was 17 I took a job in Shelton, WA that was *just* a few miles outside of their native coverage area (they actually had an app in to the FCC to put a tower right where I needed it but it died on the vine), and they just never could get to a point of offering any sort of a break on roaming or a regional/national plan that was anything less than a total joke. I was set to go to AT&T's brand spanking new GSM network with a Siemens S46 that could was supposed to get both GSM and TDMA (paid a $400 deposit and everything) except they flat-out lied on the coverage (getting "emergency only" on Voicestream really ticked me off, and the thing would never connect to US Cellular's TDMA network that was right there as well) so I went to the carrier that provided 5 bars on roaming on my Qwest phone--and that's how I've been at Sprint ever since.

Actually looking back on how everything has turned out, it's been pretty good. I've ended up on SERO Premium, and have pretty much avoided all the BS that the old AT&T Blue people went through and the whole myriad of plan increases we have been discussing. Plus about 2 years later they merged in most of the Qwest network which filled in a bunch of coverage--then added in Nextel synergy sites which expanded the highway coverage quite a bit up here.

--Nat

[larryt510]

I remember quite well I paid $249 for my StarTac back then since I was 15 at the time and that was *ultra cool*--

Yeah I forgot that they started out at $249/$299 and then dropped in price as time went on. I was late to the party getting one and only paid $149 at Fry's after the phone had been out for a couple of years.

the ultra-thin Sanyo that Sprint had (the model escapes me but it was THIN for the time),

I think it was the SCP-6000. I remember it well because forum user Anthromatt found a clearance deal for couple of them for next to nothing once they were getting near EOL. I regret not getting one of those. I also regret never owning a Moto V60 but it took Sprint a long time to offer it and by then I had moved on to something newer.

[AnthroMatt]

I think it was the SCP-6000. I remember it well because forum user Anthromatt found a clearance deal for couple of them for next to nothing once they were getting near EOL. I regret not getting one of those. I also regret never owning a Moto V60 but it took Sprint a long time to offer it and by then I had moved on to something newer.

Ha, it remember that. I think I got two of those brand new at a Sprint store for $35 each when they were clearing them out.

Sent from my HTC PH39100 using Tapatalk 2

[NGeorge]

I think it was the SCP-6000. I remember it well because forum user Anthromatt found a clearance deal for couple of them for next to nothing once they were getting near EOL. I regret not getting one of those. I also regret never owning a Moto V60 but it took Sprint a long time to offer it and by then I had moved on to something newer.

Yeah I remember that too... Seems there were 2 versions. A non-1X version which was out pre-Vision (and was single band IIRC), and a 1X version: The only 1X phone Sprint released with a black & white screen--which is why they blew them out the door for so cheap not too long after when all their new phones had color screens.

I also remember the Motorola Timeport that Sprint had--it was basically a StarTac with a color screen, and I wanted it *bad* for my first phone--that was up in the $299 range too, and I'd have probably went with Sprint right off for that if they would have let me sign up as a kid.

The only drawback I had with Sprint back then was I remember they were very Motorola-unfriendly at a time when Moto had some really great phones (Qwest OTOH was VERY Moto friendly). Sprint had an old version of the Vader and the bar phone (v120?) and then that was it--and by that point the Vader was a downgrade from the V60 I already had. ...then we didn't see a Moto for a LONG time. I waited for another V60... and waited... and waited... Sprint was the absolute last carrier to get it over 2 years after Qwest, their version didn't have data, and IIRC I was already 2 phones in by that point. Then they pulled the same thing with the Razr (no, the Samsung A900 was NOT a Razr lol).

IIRC it was only around 2008-09 when they started getting friendly with Motorola again.

--Nat