Thursday 10 September 2015

Cellphones suck.

Yesterday was the Apple keynote at WWDC, and as usual they announced a number of new phones and devices. And  while there was nothing unexpected when they started talking about the pricing on the phones I just had to shake my head, not just for the fact that Apple is expecting people to pay 900$ (CAD) for the iPhone 6s for the base model, but for the fact that all the folks making smart phones are expecting people to be paying that much for a phone.

Now this is for a unlocked phone, and a lot of people will say that the phone is not that expensive because they will just get the provider to subsidize it when they renew their contract. Funny thing - the cell providers don't actually do you any favors with that subsidy. Take for example Fido, and the cheapest plan that you can get from them on the current iPhone 6.

iPhone 6 (Upfront Cost) - 349.00$
Monthly service cost - 80.00$/month
Service Cost (24 month) - 1920.00$
Total Paid (24 month) - 2269.00$

Now with Fido you can get the same plan, if you bring your own phone, for 40$ per month. So if I go out and buy a unlocked iPhone from Apple directly here's what I wind up paying:

iPhone 6 (Unlocked from Apple) - 769.00$
Monthly service cost - 40.00$/month
Service Cost (24 month) - 960.00$
Total Paid (24 month) - 1729.00$

Difference - 540.00$

So basically you wind up paying a extra 540$ for the privilege of getting a locked phone from your provider and getting stuck with their service for at least 2 years. And the kciker is that even if you wanted to pay the provider for the phone and get the cheaper plan they still want to charge you 839.00$ for the privilege of getting the phone from them. An extra 70$ out of your pocket just because they hand you the phone rather than getting from Apple directly.

This is a nice enough scam that Apple is getting into the financing game for the phones now. Right now it's only in the US but I can see it showing up here in Canada soon enough. Looking at the numbers they are only charging you 124$ US over buying it outright, and you wind up with the AppleCare warranty on the thing as well. Honestly if I was one of the existing carriers I don't know if I would be pissed off because Apple was taking a chunk of my cheddar by cutting into what I can make selling the phones, or happy because I don't have to carry the subsidy over the life of the customers contract.

And this cost is all for a 16gb base model phone. Yea, great value for the money there.