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The Problem With Mobile Devices, The Price Tag [Opinion]

Standards in the mobile industry have been few and far between in the past. However, cellphone manufactures have recently done away with their different chargers and have adopted the microUSB. While the addition of the microUSB has been much appreciated, there have been other adopted standards that are just unbelievable.

Somewhere, someone thought of the magical price tag of $199.99 as the fair price for a top of the line smartphone, that is with a two-year agreement of course. If you were to buy one of these incredible mobile devices off contract it would run you an upwards of $500 – which is just ridiculous. A majority of these smartphones cost anywhere from $150-$200 to produce, yet these corporations feel inclined to market them with a 100% price increase. You then receive the two-year contract discount, which in the end has you paying much much more. Think about it, every 14-18 months you are spending $199 on a new phone and continue to lock yourself into your (most likely) expensive contract.

Now with the introduction of 4G, service providers are again increasing the price of their plans and smartphones. I plan on pre-ordering the Galaxy Nexus the moment it is available – even with that $299 price tag. However, this mobile phone will cost me more than an Xbox 360, PS3, or even a new HD television – if I was to buy it off contract it would cost me more than some computers.

Just think about it, how much will a 5G phone cost, or better yet a new quad-core one? These prices are absurd, why do we continue to buy into them?

  • Kevin Kim

    >A majority of these smartphones cost anywhere from $150-$200 to produce,

    source or did not happen

  • Anonymous

    It doesn’t matter what it costs to make.  It’s about how much they can sell it for.  People buy phones every year or two for $200 with a contract extension.  They are making money off of it, therefore it is right.  That is the proof that it is what consumers want. 

  • I remember when getting a camera on your cell phone was hot sh!t. Smartphone prices (BB, etc) at the time were obscene – $600 and up as I recall (VZW). I’m not even sure if that was before or after a 2-year agreement.

    If anything I think the prices have trended down when adjusted for inflation. When you consider miniaturization and the quality of the handsets – even the “crappy” ones – it’s pretty amazing what you can get these days.

    My wife and I bought OG Droids in July of last year on a BOGO deal, and leveraged a big box member’s only chain deal: $50 gift card to big box store for each phone purchased, so that was $100 back in our pockets to spend on groceries. Total cost of the upgrade? $70. You can’t beat that with a stick, especially considering all the extra non-phone functionality that’s built in.

    So, I disagree. While they aren’t quite ‘free’ yet (cough iPhone 3GS cough Best Buy Fascinate giveaway over the summer cough), prices aren’t really that bad, as long as you’re not chasing after the latest and greatest hardware. You can get a heap o’ functionality if you have your eyes open for a bargain.

    • Mikes

      Absolutely, cell phones are getting cheaper after you factor in function. My first handheld cell phone, an NEC P300 (circa 1991), was $800 and another $800 for the 3 watt car kit to make it work well when not in an urban area. The battery didn’t even last a full day.

  • Anonymous

    If the G-Nex was really what I wanted it to be I would have paid more. I was wondering what happened to premium products, actually paying for everything that I wanted. The tech seems to be there.

    I think these companies are getting distracted trying to figure out what they can leave out of the current phones to put it out in 6 months as an upgrade rather than putting out a real top of the line phone.

  • Tom

    It’s called free market. As long as people say “I plan on pre-ordering the Galaxy Nexus the moment it is available – even with that $299 price tag”, companies will continue to raise prices till they find the breaking point of the customers.

  • Anonymous

    My big issue is the no-more-single-year contracts…I can’t last much longer than a year on a phone; to do so in this age of such amazing technological advances is cruel and unusual punishment!

  • Mikes

    “A majority of these smartphones cost anywhere from $150-$200 to produce”

    Where does that come from? It’s very wrong. For example, the HTC Thunderbolt, which sells for $569 from VZW off-contract, is estimated to have a $262 Bill Of Materials. Now, add development costs, manufacturing costs, packaging and accessory costs, distribution and shipping costs, marketing and advertising costs, service and warranty costs, paying for facilities and janitors and administrative employees, etc., and finally, add a reasonable profit for both HTC and Verizon, and $569 isn’t unreasonable.

    HTC reported that in Q2/11, the average selling price they got for a phone was $349. The TB is a high end model, so it would sell to Verizon for significantly more than that average. Let’s say the real cost for HTC to produce a TB is $300 (probably low, given the parts cost). HTC said they made about a 30% gross margin in Q2, which would put the selling price (HTC to Verizon) at ~$428. Compared to that $349/phone average, that appears to be a reasonable number.
    So, say VZW buys a TB for $428. They’ll sell it to you outright for $569, making a 25% margin. That’s not unreasonable, and their cost is nowhere close to “$150-200.” 

    • SjB

      it’s insane to factor in marketing and ads into the cost. that’s the cost to get ppl interested in the product. that cost is null if a device sells enough, it’s not factored into the cost of each individual device.

      • Mikes

        So, you saying marketing and advertising don’t cost money. Google disagrees. And no, it’s not “insane,” it’s just basic business economics, which you obviously know little about.

    • BionicFaither

      That is a FAIL way of looking at that…Marketing is an overhead for HTC…not a charge passed on to the end-user.

      • Mikes

        LOL. Where do you naively think the money for marketing comes from? That it grows on trees?

      • RW-1

        You must be kidding, of course it’s passed on. It’s that you have method for having them take it off when you purchase.

        Couple of years ago a car dealership actually had the stupidity to place an “Advertising” fee on my invoice, had them remove it because I clearly don’t pay for your overhead.

        But you have no such option here as the MRP is that, and it is factored in.

    • Bluemillion

      I love responses like these. It almost seems like you were a planted seed to help steer the conversationn one way, or you are trying to make a haphazard validation for spending an absurd amount of coin. It has already been proven that cellphone manufacturers sell phones and tablets through carriers because they are able to unload the product at an inflated retail price on the carrier, who then absorbs the risk of selling it to the consumer, because they know that they will make the money back in contract fees. But rest assured that change is coming. It seems that Big Red is growing tired of assuming that risk becbause of phones like the Thunderbolt, which don’t sell as well as hoped. As a result, -one day the hardware will be offered through a standard retail outlet, and you will then go to the carrier for the service only. That is theblue next big change coming down the pipline. Big Red will do it first, the other carriers will follow. And guess what? That is inside info heard in a meeting, so you can pretty much count on it. The manufacturers are going to have to offer the hardware at a more attractive price to consumers at that point, although I am sure they will try to go with 500 dollars or more at first until they find that it is unsuccessful.

  • Kentshaw2010

    I agree that prices are high and the increase was a bit annoying. However, the “cost” as you stated isn’t what it seems as that amount doesn’t include any money spent by the OEM for research and development that must be recouped. A similar argument is made for pharmaceuticals although the R&D there is considerably higher than for smartphone OEMs. In 2010, Motorola Mobility spent 13% of their revenue on R&D. Merck spent 18% of their revenue on R&D in 2010.

  • Raven

    What choice do I have? It is as if they have grabbed me by the base of my snarglies!

  • I was actually thinking about this yesterday.There are several elements at work here.  Personally, I am willing to fork over the cash because I need a phone with organizational capabilities that I lack (ADHD).  However, I could get it at such a smaller price tag.  Phones are some of the fastest churned out gadgets these days.  They are widely used, multi purpose (could replace my laptop if I weren’t a gamer). Because of the phone’s abilities, I am not buying a new iPod (old one broke), a GPS nav system, or a new portable gaming device– the price tag seems more reasonable. As far as contracts go, I have long been a permanent Verizon customer due to my extraordinary ability to beat up my phone by the end of each year.

  • JW

    I can’t wait for the Nexus. The price is what it is. Go out work hard and save money maybe you have to wait a couple weeks to save up I don’t know. Its not the evil corporations that are at fault here. It is okay for them to be profitable. There isn’t a Dans non profit wireless that sinks billions in network each year or a Dans non profit handset manufacturer that spends millions on R&D, patents, licensing, marketing etc. If people didn’t buy them at the current pricing then they couldn’t charge 199.99 to 299.99. However most people have no problem dropping a couple bills every other year on the new smart phone. If you do Dan I hear the motor citrus is on sale or you could treat yourself to a nice LG vortex. LMAO

  • 4djincredible

    I work for Verizon and the reason we charge close to $500 for a smartphone without of contract is because thats what we get charged from the manufactuer. Verizon makes no money on the product our money comes from the 24 month agreement. Some Verizon stores will give you credit for your old phone but that depends on the condition of the phone and the market that you are in.

  • Kris Brandt

    I’ll take the $200 “subsidized” price over the $500-$600 retail.  The price of the plan will remain the same, regardless of whether I get a contract or not.  If I’m buying a new phone every year, then I might have an issue.

    • Jake

      Exactly. I’m grandfathered into VZW’s unlimited plan, and I love the service, so I won’t be leaving any time in the next few years. Might as well take advantage of the discounted price on the phone. Plus, two year contracts don’t mean that you must stick with that plan for two years. You can switch to a cheaper plan with fewer minutes and  text messages within your two year contract.

  • Anonymous

    Don’t care. At this point, I now take the buying a Car and TV approach: always buy last year’s model; its always 65-75% cheaper than the latest model. In terms of cell phones, just wait 4-6 months for a BOGO deal…

  • Anonymous

    It’s just like computers with a high end and low end, people pay the tax for the latest tech.  The vast majority of people are buying low/mid level and spending $0 – $100 on a phone otherwise Android would never be where it is.

    I do think the two year is a long time now to lock yourself in however they aren’t really subsidizing the phone, they are giving you a loan with interest in the form of a higher service price.  IMO they build in the price of subsidies into the plan.  In fact if you buy off contract you are not receiving this “benefit” AND still paying the extra premium monthly cost thereby paying even more.

  • Anonymous

    for the price of a new phone i could go buy an ounce of weed. the good shit….. i mean seriously those are crack prices. ik the phone companies wanna make money but seriously? $500 no contract or even the xoom was like 200% over priced.

  • Anonymous

    I’m eligible for an upgrade in March but the Galaxy Nexus is MAP’d until May… I’m sure there’ll be something even better around the corner but I might opt for an older but cheaper phone at that point.

    I’m was trying to convince my friend who is eligibe to upgrade right now to get the G-nex.  Unfortunately when he saw the price he balked and is probably going to go back to a flip phone or an iphone.  He said he could buy an xbox 360 for that price and he’s right.  I love my phone, but I’d rather have a 360 if I really had to choose.

  • Anonymous

    I’m always going to have a cell phone, so a contract doesn’t matter much to me.  I have 4 lines on the family plan so me and the wife usually get what we want and pass the hand me downs to the kids, and then use their upgrades for the latest and greatest.  New phones every 10 months works for me.

  • Anonymous

    It’s even more ridiculous now when you can buy a high end tablet for less than the retail price of a new phone.

  • Anonymous


  • Lunshbox

    I will be buying my wife a GN. She still has an OG that she just let me root and flash Cyanogen onto (not that there is anything wrong with the OG). I love the GN, I am just not sure I am down with a phone that is a) crazy expensive and b) lacks an SD slot. But that is just speaking for me. My wife is in love with the GN (and rightly so), I am just not 100% sure I want a GN for myself. My contract doesn’t end until July so I may wait to see what comes down the pipe in the way of a quad-core phone (Not Moto. I have had three Moto Droids and one HTC and would rather use Moto for a door stop *posted from my Droid X :P*)
    To the question raised in the post by Dan, we will continue to buy them because we are all tech heads and love having a phone that is more powerful than the first 8 computers we owned combined (and that is speaking as someone who is only 30). Occupying Verizon and demanding lower prices is pretty ridiculous and should in no way be compaired to what has happened on Wall Street.
    I know this may be controversial, but when it comes down to it we don’t need a smart phone (business people excluded). When it comes down to it most people would be fine with an old flip phone. Not having a smart phone will not take food off of your plate or turn your power off (and with the prices of plans and phones it would probably be to the contrary). If you don’t like Big Red’s prices, go somewhere else. That is the bottom line. Vote with you wallet.
    I will personally stay with Verizon (at least in the short term) as I like having coverage and not dropping my connection everytime I shift in my seat. If another carrier has a better price and offers the same coverage where I live then I will switch. But we will continue to spend more and more for smart phones because we like them, we don’t need them.

  • I buy phones outright for the full price.  here is what really bugs me….i bought an iphone for att service, but when i got a contract from verizon as well,  verizon told me that i couldnt use my i4….so dead phone,  I bought the d3 outright via verizon, but I’m not sure if I wanted to switch whether att would let me use it.  I plan on getting the galaxy and will pay in full too for that one…..I just think if you buy it and pay full price you should be able to connect it to any network you want to connect with. 

    • Mikes

      It’s not that they wouldn’t. They can’t. ATT and VZW use different cellular technologies and frequencies. A phone from one network will simply not work on the other. That may eventually change, as both are moving toward LTE (Verizon only uses LTE for data at present, calls still go over their CDMA2000 network).

      • ” A phone from one network will simply not work on the other”  Yes, thanks, but thats my big complaint…..Im buying a $600+phone/piece of technology, I should be able to use it anywhere just like a tablet, laptop or desktop which essentially what these things are now

  • Anonymous

    Its the American Way(tm) buy stuff now and worry about it later

  • drinksprite

    verizon sent me an email about two months ago granting me an early 1 year upgrade so im gonna use that. ill just be paying an extra 20 bucks as an early upgrade fee. cant waitt til nov 10!

  • The reason why we are all still buying these smart phones when the prices are rising for 4G phones is because we all want whats new/better and we all basically will pay whatever the cost is the get what’s hot as of today untill a new phone comes out a few months later than we buy that phone.

  • Anonymous

    This is a good topic to bring up. +1 Droid Life! I don’t agree with the price tag on these phones either. If you ask me, more than $150.00 for an upgrade phone is asking a lot from your customer when your a phone service provider, and we all know how the modern carriers are. I am on Verizon like many of you guys here, so if I chose to switch would i get a better priced 4g phone compared to big red? Probably not. So do we as consumers have a choice, without lowering our expectations, to get a better deal on these top tier phones? Nope. I will go ahead and throw out the, “Thank you Capitalism”, line and point my finger to some ex President. Yep I said it. 

    • Maybe the Gov’t should step in and regulate the price points of these point.  Big Red pretty much as a monopoly on the real 4G market so they should choke them off. 

      was that Sarcasm??

  • Anonymous

    The reason why we keep buying new phones is because we’ve fallen into the hypebeast trap. I know the New Nexus is bound to be awesome. Yet, every single phone release claims to be the definitive phone to get right now. Let’s face it, until we decide that we are jumping off this bandwagon then we’ll get caught up on each and every upcoming device. Is that the fault of the providers? In part, yes. It’s good marketing. But we don’t really need every device that comes out, and sincerely, not the minute it comes out. For me, I intend to keep my rooted Thunderbolt using Liquid’s 3.0 AOSP, by giving it to my wife. It’s smokin’ fast and I’m certain that they will have an ICS build sometime down the road. I also do intend to upgrade my phone to the nexus Prime. However, I will be upgrading it sometime in Q2, 12. By then, the Prime will be old hat, outdone by every major manufacturer since January, and I’ll likely get two for $99 out of contract. And if there are any bugs, they will at least in part be ironed out. If not, I will at least have waited until someone rooted it, and modified it to be more impressive than stock.

  • klaviste

    I like what the new devices do.  But I agree that those devices don’t deserve $500-600 retail price tag looking back at level of their support.  How many bugs do they get by without fixing them?  For most devices, do you get more than 1 patch or upgrade per year?  while they are not doing anything, why are they so expensive?

  • Anonymous

    I won’t and am leaving Verizon soon. I just cannot justify paying so much for the service and phones (on a contract).  They did make a nice profit this year though….

  • Thats why i am getting a 3g smartphone because 4g on Verizon is too damn expensive, i wont get a 4g phone until they reach the standard at 199.99 2yr contract. Lets have strike everybody!!!

    • Lets all stop upgrading for a little while and keep what we have until they lower the prices!!!

  • Anonymous

    It’s ridiculous what they charge per month AND what it costs for the phone. Will be getting the Nexus or Vigor,but the wife will be ticked if a couple years down the road here we go again. These phones are nice but not tablet priced nice. It’s a bit absurd….

  • It would appear smartphones are an inelastic product. I’m hoping Amazon will have an ‘opening day sale’ on the Galaxy Nexus where the full retail will be the same as new-contract like they did with the Bionic.

  • Always haggle. Never pay full price. {{-_-}}

  • Anonymous

    I knew this would happen a long time ago, it all started when the DROID charge came out. It was the first smart phone for 300$, it was unherd of, but i knew that would be the new normal price for a smart phone

  • Sperho

    $300 for a modern high-end smartphone.  Freakin’ bargainsauce.  These devices are nothing short of amazing.

  • Jimmy McMillan

    The rent is too damn high!

  • Prickee

    We buy because phone companies got US by the short and curlies and WE want the latest and greatest so why should they change??

  • Anonymous

    I don’t think the prices of these devices are ridiculous. Its the price of data. It is absolute BS that we are being charged upwards of 100 dollars a month for 2 GBs of data and unlimited talk and text. If I had to take a guess at the profit margin on mobile data i would guess it is approaching 1000%, maybe more.

    I’m happy to spend $500 to $600 bucks on a smartphone, think about everything they are capable of… Its the providers that are truly ripping us off, not the smartphone manufactures.


    i live in New Zealand. All high-end smartphones, whe  they finally arrive, and > $1000NZ. NZD = $0.66 US. Do the math. Everything in New Zealand is a rip off.

  • Tjcard03

    i say if they’re going to charge us that much at least let us upgrade every year instead of 18-20 months.

  • Anonymous

    Spoiled… Phones like the galaxy s (one) cost upwards of 1200 to 1500 like in ‘exico where they make less than minimum wage here. I used to buy Nokia Communicators for over $1000 back in the late 90’s. That’s how much smartphone cost and should cost… Why should it be cheaper than $500? Anything under $800 is still cheap in my books. Entitlement is a funny thing.

    • There are cell phones in ‘exico? Who the hell knew. I mean cares. My bad.

      • Anonymous

        My exact same feelings. Don’t whine if you can’t afford these phones. Get a job.

  • Anonymous

    I am also disgusted with the price of premium smartphones.

    But like you, I’ll be forking over $300 for a SGN next month and passing my DX onto my wife or kid.

    I did manage to talk Verizon into an early-upgrade discount though, I guess that’s a small victory…

    • When were you initially due for a upgrade? Im not up until March with my last loyalty discount as well, and was hoping somehow to sweettalk or beg so im able to get the Nexus.

      • Anonymous

        Step 1. Wait for the phone to launch. Step 2. Call to cancel your plan, tell them your phone is crap and you are going to sprint to get a galaxy. Step 3. Let them pusuade you to stay and offer you a similar device (nexus) at new contract price. Be firm, if they try to call your bluff, tell them you will check with Sprint and call back to cancel. Either way, they will add notes. You will eventually run into a retention sales person whom will make you a deal. Has worked for me many times. Aside from the device at new contract prices, they can offer you up to 60$ in accessories. If you are a late bill payer or have had your line cut due to payment, don’t bother trying any of this. This only works for long standing customers with good history.

      • Jer85008

        Not until July 2012! We have had a family plan with four lines (three smartphones with data) for several years, so I guess I have some leverage. I simply asked what the ETF was for my line, because I wanted to upgrade and figured it would be cheaper to pay it and either move to another carrier or sign a new deal with Verizon. I asked if there was a way for me to just pay the ETF and get a discount upgrade instead of going to all the trouble, and they offered me an early upgrade on Nov 12 for a $20 fee.

  • Nathan Hosford

    If we paid normal retail for phones it would ruin the whole phone echo system we would not need to upgrade ever and these company’s would make no money and could not afford to build great networks like verizon lte.There would also be higher monthly contract cost.

  • Djstar2k2

    really its insane but i guess the argument is you will need service for a cell phone.  but like you said b4 if it only cost 150-200 to make why is 500 full retail right or even fair?  esp with android oem have the software free and the chip makers so all they have to do is design.  oh and skin.  my contract up in 3 weeks and and what the show for it ?  nuttin just another chance to sign up for 2 yrs.  u cant tell me a carrier pays the full retail price or the price a customer pay for those phones.  an arbys roast beef to cost 3.19 to make more like 3 cent for the bun, .75 cent for the beef and.30 cent for the wrap.  but in the end ill pay it for the galaxy nexus and shut up even tho it has no kb but im gonna wait for that xmas bogo

  • Smooshy-Bunny

    While I agree with you about this line
    “A majority of these smartphones cost anywhere from $150-$200 to produce”
    You are only including the physical parts in the price assumption. What about the marketing, R&D, testing, engineering etc. that goes into these phones? These firms have to make profit after all. So they can continue to make great phones for us.

  • Darrell198023

    I agree totally! There are a few things I refuse to do. 1) pay full price or subsidized price for a smartphone. I buy my phones slightly used. 2) I will never again sign a contract that is loner than 1 year. This year marks the 8th yea that I have been a customer of Verizon. Of those 8 years I have only been under contact 3 years.

    • Anonymous

      Hey, I agree with your concept of not signing a contract…but then you indicate you’ve been with Verizon for 8 years, so what real harm would there have been for you in signing a contract, since you obviously aren’t going anywhere else.  I’d argue that you’ve cost yourself money by not taking advantage of subsidized pricing on phones–I was on Verizon 1 year contracts for three years, and it was great, only paying $50.00 premium over 2 year contracts for subsidized phones, a lot cheaper than buying slightly used. 

  • Hell I’d smack a kitten on top of that 300 if they’d have the Nexus ready for PDQ

  • Absolutely agreed. These cell phone carriers are absolute scam artists.

  • Anonymous

    My phone and my computer are the most useful things to me so I am willing to pay a little more for a good one. But $300 on a 2 year contract is pretty much the maximum I would pay.

  • As a consumer, I 100% agree with you. However, if I put on the manufacturer hat, I can’t say I don’t understand their reasoning. First of all, the production cost is just the manufacturing cost. There are other expenses, such as R&D, marketing … man, even hiring someone to clean your office costs money (the bigger, the more you will have to spend.) Secondly, business is not science, there’s no guarantee your products would sell as good as you expect. Sure, I can only charge a 10% premium, but with a margin so low, a single mistake could put the whole business in risk.

    But, $299 for the Galaxy Nexus is just too high. I have to buy FOUR to replace all 4 of the Droid in the family!

  • Dan

    Because we’re techno-junkies.

  • Hey Dan, if you could make something for $200 would you sell it for the same price? Or would you sell it for more to make a profit? Just a thought…

    • I work for Verizon as a Sales Rep. The $199 is the price the wireless company charges you, not the manufacturer. The full retail price is what the manufacturer charges the wireless provider. For the wireless company to recoop their cost for the device, is where you’re 2-year contract price comes in. You pay $199 for the phone with the promise to pay a data package of $30 a month for two years. For Verizon to put a customer on 4G it cost them under $5 a subscriber. It’s how companies make money and stay in business. If there was no profit there would be no money for R&D, employees, and factories. Soda cost just pennies to make but you sure shell $3 for one when you’re thirsty! lol

    • I think you misunderstood my point.  Either way, the contract purchase price seems a bit arbitrary, given the $$ a 2 year contract costs.

      Mostly though, I am just impressed with the technology, so I’ll pay.

  • Anonymous

    What sucks is the prices drop tremendously after awhile. Xperia play was $199 and its free now. It really just came out not too long ago. 

    • I”m sure the Bionic will be BOGO shortly.

    • Epdow

      That price drop is what Bill Maher called “A repeal of the Geek Tax “.

  • Anonymous

    The price is that high simply because that is the price that we will pay.

  • Braston Bland

    Maybe I’m part of the problem. I’m going to buy the G-Nex day one no matter what (currently using a BB Bold 9650 😀  ), now I kind of feel like that makes me part of the problem and not the solution. I am so enamored with this piece of tech and cannot wait to have it one of two things is going to happen. A) I’m going to drop $300 bones and use my available upgrade. B) I’m going to buy the phone full retail with no contract extension. I’ve got $700 bucks saved waiting on this. Am I safe to assume if I did buy it full retail that it will hold it’s value better than say a RAZr?

  • Nathan Hosford

    Tablets prove this point even more.

  • Anonymous

    Never buy contract phones. The spawn of the devil.

  • Skittleoid

    Thanks. Someone finally addresses  this problematic topic. I can’t stand how much they are charging for a phone just because it’s a phone. Like what makes the (I*od touch $200) like $500 cheaper than the I*phone.(Sorry used crapple example because didn’t want to look up price of galaxy touch.)

  • Anonymous

    You know, he has point.

  • Price we pay to be ahead of the curve – Double edge sword if your a techie really. The price has been set by “us” we want them so bad and shown our greed for technology thus providing the fuel. At the rate devices are launched the price is only exponential. We are paying a premium to have the latest and greatest why cuz everyone else has the latest and greatest. 

  • Nsplay

    i agree, i think its disgusting that they charge so much for a non contract phone. i think if a new smartphone cost $400 the most without a contract that it would be more fair. $650 for a 16gb iphone 4S…. and i think most Droid phones are in the nieghborhood of 500-600 themselves is just way unjustifiably tooooooo much !!! WHAT GIVES THEM THE RIGHT TO CHARGE SO MUCH ???

  • Anonymous

    LTE device prices are stupid. There is no way the Thunderbolt and DROID Charge are worth close to what they are charging.

    I don’t have a huge problem with phone pricing except for off contract. There is obvious collusion and price gouging when a single core 512MB RAM device costs as much as a top of the line dual core phone. Contract price I’m not too worried about, if $200-$300 is a problem then paying close to $100/month for service is also too much.

  • SjB

    i can’t believe i used to buy a new phone every few months before smartphones came out. those were almost $400 a pop at the time. so stupid.

  • Anonymous

    Don’t forget that the $150-$200 quoted in the article covers the hardware only.  It doesn’t cover labor and development costs, which can be quite significant.

    To put things into perspective regarding the high cost of development, for example, I have a piece of hardware (not phone related), sitting on my desk.  It’s small, about the size of two coffee mugs stacked, made of titanium, and has a VERY simplified geometry to reduce the fabrication costs.  It was made just to run a simple test so it didn’t need to be an exact replica of the complex final design.  The total cost to fabricate it was ~$10,000.  The total cost to run the short 2 day test was ~$20,000.  Both prices include labor and material.

    This is for one particular component out of hundreds that would form a final product when assembled.  And of course, don’t forget the final assembled product undergoes its own various tests.

    Granted, this is definitely not an apples-to-apples comparison since my line of work is assuredly more expensive.  However, I imagine Moto’s products go through similar development procedures.  Thus, their MSRP needs to cover all those costs + extra to actual obtain profit.  The metrics they use to determine those numbers I couldn’t say exactly, but it probably includes the number of phones they expect to sell, which is certainly undervalued to save their butts in case of a total failure.

  • Anonymous

    Pricing is based on utility.
    Phones should cost no more than $149, preferably $99
    Tablets should cost $149 – $299
    Laptops are $399 plus

    • Anonymous

      This is so wrong….price is based upon demand.  If people are willing to pay $600 for a phone then, that’s what it is priced at, as soon as people stop willingly paying that much for the device, the price will drop, or the manufacturer will go out of business. That’s the way of the world.  Where I have a problem is when Government interferes to create quasi monopolies, like we currently have in the mobile service world. 

      You may say I’m only willing to pay XX for such utility, but that doesn’t mean that’s what the price is or should be.

  • Jim

    So, I’ve use the Best Buy buy back plan for the last two phones I’ve owned.  I shell out a bit more for the phone (trade in for 40% of retail up to a year) BUT, I don’t have to sign a new contract!  If you get the Black Tie insurance plan it drops the cost of the plan from $60 to $30.  I’ve been able to cancel the insurance program after a month but Buy Back is still in effect.  Other option is to sell your phone on CL or use one of the online sites.

    • SjB

      this is what i plan on doing from now on as well. i don’t think i can go 2 yrs with the same phone with tech moving as fast as it is right now.

  • OGdroid1

    A VCR used to cost $2,400.  My 32″LCD was $1,000.  DVD players can now be had for $30 and my LCD equivalent is now just $329.  It is the technology tax, early adopters pay more.  LTE is brand new and a couple of years these things will start to be replaced, just like LED replacing Plasma etc….

  • Anonymous

    Who is more the fool? You pay 299 for a device with the thought that you are subsidizing the device in your contact and plan. However, no contract and you pay 600 for the device yet your plan is not discounted. You are still paying for everyone else’s devices now.

    • Jake

      Who is more the fool? I pay $299 for a device with a two year plan. You pay $600 for the same phone and two years later we’re both still with the same carrier (and in that time you’ve probably switched phones twice, paying $600 for each of those, too).

      • Anonymous

        Totally agree. There is no advantage to getting a contract free device. I have zero ambition or desire to change carriers so I have no problem signing a two year deal.
        Sent from my ASUS Eee Pad

  • Theres no other alternative, what a I going to do write a letter?

  • Anonymous

    2 years ago I paid $299 for my original Droid. 

    So no, I don’t think they’ve gotten out of control with prices, I’m surprised they’re still at $299.

    • Anonymous

      With all the different varieties of phones, I can’t believe every single one of them costs one of three prices. It is an amazing coincidence when you consider the odds.

      • Anonymous

        Prices have absolutely nothing to do with what the materials cost.  They simply charge what they believe people will pay. 

        Case in point, Apple charging $200 more for the 64GB memory card 4S.  The cost is probably within pennies of each other realistically but they know people will spend the money because they need the extra memory.

  • Anonymous

    What I don’t understand is why the full retail price of a phone is double that of a tablet with better specs, larger screen, etc. You can’t tell me that a 3G/4G radio justifies double the price.

    I don’t think they are worth $600… I just think the price them at that so people WILL NOT buy them.

    • Anonymous

      Making things smaller is more complicated and thus costs more to develop.

      Also, from what I understand back in the day, the phone manufacturer sells the phone to the carrier.  The carrier then resells the phone to the consumer.  In all likelihood, Verizon is most likely losing money on all LTE devices, which is gained back by contracted plans.

      Considering the design of the new Razr, it is probably the most expensive handset they will carry (probably even more than the Gnex).  As a result, they probably stand to lose very much money per Razr handset sold.  So really the push isn’t to sell the Razr, it’s to secure people into a contract.

      Based on how little I use my phone, I’m sure Verizon would make their money back from me in 2 billing cycles.  Yeah, that sucks and it’s annoying, but that’s how this type of for-profit service company operates.

  • Talies1020

    I respect most things written here, but this is garbage. 

    The ONLY reason these prices are SO outrageous is because we keep paying them. They wont slow down, let alone come down, until we stop paying them. 

    $600 for a piece of cutting edge silicone is fine by me. My real gripe is that I have little incentive to buy the device off contract. why pass up a $300 discount that “doesn’t cost me anything”, or more precisely, the cost is already built into my monthly fees, whether I want it there or not.

    • Exactly, I never understood this. Now that the ETFs are prorated, it makes no sense not to be in a contract. Its not like your monthly service charge will go down when you are out of contract. Might as well get the phone on contract, and even if its 6 months later, the pro-rated ETF + Contract Price will still be less than full retail… so you saved money.

      • Anonymous

        AND T-Mobile offered lower rates for people that chose to bring their own phones, for a while, but stopped offering.  Most likely because they couldn’t find enough people willing to pay full price for a phone.  For some stupid reason people in the US are conditioned to look at the “out the door” price, instead of considering the total price of usage over the expected life of the phone.

  • Pennywise

    Yea yea yea… but how can we hijack this into a massive e-peen praise party for the Galaxy Nexus?!

  • Anonymous

    Anyone have any guesses on how much I’ll have to pay for the Galaxy Nexus if the last time I upgraded was in January 2010? Also, in going from 3G to 4G, do I get to keep unlimited data?

    • Anonymous

      1) You probably have an upgrade right now–or if not now, then soon. Check on VZW’s website. Assuming you do, it’s gonna set you back a cool 300 dollars.

      2) You do get to keep unlimited data when you trade up to 4G from 3G.

    • It will be 200 because you still get new every 2 year

  • babadush

    It’s because they are small. Smaller = more expensive. It’s always been like that.

  • horizon

    What is sad about the industry is at this point, I really have no “choice” anymore who is my carrier. Because of grandfathered plans on Big Red, I get 500 minutes, unlimited texting, insurance, and unlimited data for $85/per month, taxes included. Now that’s a great deal…but say the company decides to take all this away at some point….who can I turn to? Sprint is the last carrier to offer unlimited data to new customers and that looks to be coming to an end.

  • I’m planning on buying this phone but got to do the talk on the phone with verizon to get the cheaper price since my upgrade is next year. Anybody want to buy a kidney I’ll sell one for this phone!   We finally get a nexus yeeeeeeeaaaaaaaaaaaaaaahhhhhhhhhhhhhhhhhhhhhhhh!

  • Riggj46

    Is it confirmed that the gnex on Verizon wont have a locked bloader?

    • Anonymous

      It WILL have a locked bootloader, per Verizon’s request (read: demand).

  • Koos

    And to support this opinion, the new portable gaming system from sony, the PS Vita, is only $250. The vita has all of the specifications of a cell phone and then some, touchscreen, huge 5 inch OLED screen, a rear touchpad, six axis, GPS, WiFi, bluetooth, front and rear cameras, and 3g data(Plus $50). Whats with that!?

    • Anonymous

      Sony sells the system as a loss leader, and makes a profit off of every game sold, they want to get as many of these in the hands of consumers as possible so they have a larger potential market to entice more game developers. 

      I may be dating myself, but there was a time not that long ago when you could get almost any phone from any of the carriers for FREE with a 1 year contract, that was when they actually had to compete for your business. When smartphone’s came along, things started to change, but from the carrier’s standpoint, why not charge more for devices with more features, especially if they cost the carrier more, and your choice is to buy a similar device for the same price from the supposed competition. 

  • Yeah phones cost way too much if you think about how much tablets cost. Just put a cell radio in a tablet and its a smartphone… Why are phones $600 retail!?

  • Anonymous

    The full retail price of a “smartphone” is simply absurb. It prices higher than a game console, a mid range hdtv, or a mid range computer. To get a so called discount, you are locked in for two years.
    And also think about this: the phone that you bought isn’t really yours (even if you buy it without contract). You don’t have the freedom to do whatever you want with it. You are locked in with bootloader and/or carrier. Wanna change carrier? Sucker, go buy another phone.

    • Anonymous

      I agree about the locked bootloader, but the carrier thing is a technology problem, not a carrier restriction.  You can take a phone from VZW and flash it to Cricket Wireless because they use the same CDMA standard, but you can’t suddenly turn a VZW CDMA phone into an AT&T GSM phone. Sucks.

      • Anonymous

        Aren’t there phones that do both gsm and cdma?
        Now, I am not sure about this. But isn’t both sprint and vzw both cdma? I don’t think sprint will let me switch my droid x to their network… Correct me if I’m wrong.

        • Anonymous

          Yep, Verizon does have some “global” phones that you can plug a GSM card into and use. The thing about Sprint and Verizon, from what I understand (and I don’t know much about the situation–I’m just a normal guy, no Sprint rep or anything) you theoretically could run a Verizon phone on Sprint, if you update the firmware AND get Sprint to put the phone on a registered list.  So in this case, yes, it is the carrier.  That being said, I have heard stories of people being successful at getting their VZW phone added to Sprint’s authorized serial number list…

  • ChrisI

    “These prices are absurd, why do we continue to buy into them?”

    The American consumer = the most reliable sheep known to man.

  • Tnparamedic

    I will be purchasing the new Galaxy Nexus…with my 2 year contract discount!!!

  • Realitycheck

    I’m confused why everyone is so shocked by this price. If I remember correctly Verizon has been charging $299 for top tier phones since the Thunderbolt. I  for one expected to pay $299 and was just hoping they wouldn’t tack on some new fee or price increase. 

    The average consumer is not going to ask for a Nexus when they are looking for a smartphone. They either want the iPhone or the cheapest smartphone available. The Nexus is going to wipe the floor with any phone currently available, but the only people who will be lining up launch day are the Android fanatics. In fact, as much as I hate to admit it, I think the RAZR will outsell the NEXUS due to the DROID label. 

    If you don’t want to or having a problem with paying $299, wait until it isn’t the latest and greatest. If you want the best phone in the world, be happy you live in an age where a device that can act as a phone/media player/game console/gps/computer/wifi hotspot/tv remote/car remote/house remote/barcode scanner/HD camcorder/digital camera/web phone/etc. costs less than $300. 

    • babadush


  • I think smartphone tech is advancing faster than prices can keep up. Look at computers or most any other tech, dollar for dollar, you’re getting way more tech than would you would a couple years ago for the same price. Now look at Android phones, let’s not forget only 3 short years ago the G1 was selling for $129 on contract, and now processors are 4x or more faster, screen resolutions have exploded, more RAM, more storage, cameras have gotten so much better, everything has improved tenfold. I think it’s because the tech evolves so rapidly, the price also jumps with it and doesn’t have a chance to settle. Also the reverse is true, used Android phones lose resale value rather quickly. Within a couple months of release you can find the phones for free on contract through third party retailers and pickup a used one for $300 or less that was a flagship phone only a few months back.

  • Lethalprophet

    Just an FYI – I work in a retail industry, where our MSRP is approximately 5.4079 times our manufacturing cost. So to see something like these phones marked up to twice their cost isn’t that bad.

  • Weskokemor

    wiser words have never been said. I paid more for my phone than I did for my laptop.

  • Ray

    its as simple as if we keep paying for it they will keep charging these prices

  • todd

    I would feel better about the price if verizon would allow activation of smartphones without a data plan or at least a cheap one. I would like to give my son my Incredible (when I get the GN) to use for a phone and use it on wifi only. Don’t want to pay $30 extra for everyone in my family.

  • My only thought is that i’m making up for the subsidized price anyways with my phone plan, so I might as well take the “discount” on the phone purchase. If I could get a discounted plan and buy the phone outright, that would probably be a good option since now it seems the price of the phone plus the ETF is MORE than the retail price of the phone.

  • Anonymous

    The real problem is that WE are all the fools.  I would love to find away to get us all to skip out on the next big phone and cancel our contracts, but that will never happen and these companies know that.  I only hope that T Mobile does not get bought out by att, as competition, if there is such a thing, should exist.

    As stated, this fool will be putting my money down for a razr and another 2 year contract. Yuck!

  • Bryan Corazza

    Only buying as my company will pay for it, not sure how others spend this type of money on a phone.

    • babadush

      I agree. I don’t get why anyone would pay retail for a phone just because it’s the latest one. For someone to complain about their own impatience and stupidity is pretty remarkable.

  • Jikhead

    This is nothing new.  If we’re going to complain about this, then let’s start a post about all these airline fees that are making them rich and profitable.  My sister has worked for AA for over 20 years.  I’ve complained about all the fees but yet she justifies them and states if not for the fees, the ticket price would have to go up.  When I discuss trying to get her to upgrade to a smart phone, she says, “I’m not paying $200 dollars for a phone!  That’s just ridiculous.”  Catch-22 isn’t it?

  • Gamecubic

        I would imagine the high price tag is there to keep demand down on some phones. They want to sell the phone, but dont want backlash from their customer base about not making enough phones for the price they are offering it at(i**one anyone?). 
        I think another reason is that the phone can and will sell at the price. I just think the phone manufacturers know that people will pay crazy prices for bleeding edge tech in phones. They know a lot of people want the quadcore phone with 4gb of ram and has the latest software right at release that is also nearly indestructible, even if the phone is $300 dollars with a 2yr contract.
        I just think those are the two main reason. I just hope these phones start to come down in price over the coming months and fewer iterations on a yearly basis. Think these phone manufacturers should also focus a bit more on phone longevity, ie making the phone work well for atleast a 2 year span(not including battery). sucks when you have your phone for a year and the phone feels sluggish.

  • Anonymous

    While I agree with the concept Dan is complaining about, I don’t think he’s using the best examples, the gaming systems were all originally priced as loss leaders since the  manufacturers get a cut of each game sold, and the HD market is incredibly competitive – AND – in the US not exclusively marketed by 4 players that effectively have a government granted monopoly on cell phones.  

    Don’t like paying so much for cell phones, don’t like the fact that all the carriers charge basically the same amount, or that they all seem to magically have the same BS fees, or that most of them impose the same limits on usage, and lock us out of features?  Well, then tell the FCC and your congressmen to quit selling OUR public air space for billions of dollars, thereby locking out most new competitors. 

    The problem is that we are locked into buying these devices from carriers that have exclusive use of public air waves, like typical utilities, but don’t have anyone regulation as far as fees, etc.  This would be fine if we had 6-10 national carriers as there would then be some competition, but today, it just doesn’t exist.  

    Wait until ATT’s acquisition of T-Mobile is approved, then we’ll really have something to complain about!

    BTW – I’m almost always anti-regulation, but in this instance these companies power has been granted by use of the public airwaves and they are abusing that…primarily because the government decided to sell access like it was a piggybank.  

  • Obi5683

    European carriers offered the SGSII for free if you signed a 40£/mo contract.

  • timmy13

    What ever happened to Moore’s law?

  • Abolian1976

    I think $400 is a fair price for a non contract. My problem is with the li
    mited data plans all the companies have went with. When we had 3g phones most were unlimited, now that they have 4g they are shifting to limited data. 4g drinks data. Sure they are bulding 4g networks but should the consumer be ripped off so a ceo can get millions in bonuses? They shoud advertise that we all need wifi connections to use these devices. I have a thunderbolt and use 10gb easily to surf and stream music while I’m out. They know people want these devices and rip them off for using their network. I know they need profits but this is absurd. We need a revolution agains these companies, they are ripping consumers off in many different ways. Sprint is an exception, but their network is slow as mollasses.

    • Anonymous

      This is one reason why I decided to stay with AT&T and pick up a GS2 instead of switching to Verizon and getting the Nexus.  I was able to keep my unlimited data plan on AT&T.

      And as a bonus, the GS2 is a pretty sweet phone.  I really like it.  No buyers remorse here.

      • Anonymous

        verizon lets those who have unlimited keep their unlimited for lte devices too.

  • angermeans

    I usually agree with the “opinions” of this great site and one of the reasons I come here is that I feel part of the community and I think that we get unbiased (slightly, but hey we are all biased in one way or another), up to date, and early news on our beloved OS of choice. I was more than happy to pay $250-$299 for a Verizon 4G LTE device (albeit the only one I have felt is even worth a dime was the HTC Thunderbolt and it has had more problems than most). I would much rather pay $50-$100 more for a device running on the excellent 4G LTE service that Verizon offers and in my opinion they are more than able to sell their phones for more than what Sprint, ATT, and especially T-Mo are offering for their “so called” 4G devices. 4G LTE is worth the price of admission especially considering the fact that LTE is as close as 4th Gen as we are going to get and is actually worth the name change from 3rd gen to 4th gen. I am a firm believer that because of Wireless providers here in America the name “4G” doesn’t mean much any more and is thrown around and abused more than a hand me down pair of jeans, but as I have said Verizon is the only provider that can actually back up that “marketing” with their offering in the mobile broadband space. 

    For me I was very worried that we would see these companies get away with charging $10-$20 more per month for mobile broadband plans and I was 90% sure it was going to happen. Every one always worships Sprint and says how “cost effective” their plans are, but no one ever complains about their $10 fake 4G tax that they charge even when their fake 4G phones aren’t anywhere near their small network of “next gen” network that they neither own nor have update a new market in over 6 months, not to mention the fact that they are releasing dozens of these “fake 4G” phones on WiMax when they know (and I doubt most outside of this Android community and droid-life reader base) that they will be moving to the much better “real 4G” LTE network they plan to start to release the middle of 2012. Not only that, but their current “4G” offerings will not be compatible with their up and coming LTE network. That is wrong and if you ask me and probably most of us I am more than happy to pay an extra $50-$100 (one time fee) to have the same $29.99 data plan. I think Verizon has handled it vert well and to be honest I am pretty sure that the manufacture is the one that sets the price. For me bring on the Gal Nexus I will pay whatever they charge and be happy with it on my grandfathered unlimited (and nations only) 4G LTE network. I don’t always agree with the networks and in this case I am only agreeing with one, but Verizon handled this system well because we all know they had to charge something and this was the best way they could have done it because we all know that we would be complaining about a 4G tax on our monthly bills if they would have done it that way. Networks usually take a loss on hardware so they can make it up during the 2 yr contract and I am friends with a guy that is high up on one of the main 4 networks here in America and he said that networks usually don’t make a profit on a device until around the 18th month of a 24 month contract. Anyways, keep up the great writing and thanks for creating a great Android community where we all are offered choice and an opinion. 

    • Anonymous

      god!.. why is your post so long? I want to know what you wrote.. but can you condense it to 3 sentences or so?

    • Anonymous

      did anybody read all of that?

      • Michael


      • angermeans

        Good god it wasnt that long. If it bothers you to spend two minutes reading then move along. I was just writing my opinion on the matter and it really wasnt written anybody in general, but the article.

      • Anonymous

        If you don’t have the attention span to read comments, what are you doing posting on here?

    • Dan

      This wasn’t a direct opinion towards Verizon (although I am on their network), more of an opinion towards the industry as a whole. It is disappointing that an off contract smartphone can run you as much as a computer. 

      It makes you wonder, as technology advances and the tools required to build these devices becomes cheaper…will they actually be sold at lower prices? Most likely not. A company has the right to make a profit but these phone price spikes should not be the answer they are looking for.

      • angermeans

        I totally agree and I hope I didn’t mean to come off as I was against you or for Verizon as Verizon is out for one reason and that’s profit. I agree when we sign a two year agreement we should get much better rates on phones that cost 150-200 to manufacture and they are charging this plus two years commit. This is the reason Verizon and others are scrambling to bring dozens of phones to market every quarter. I just wanted to bring light (and my opinion) to this matter as most think that Verizon and wireless carriers charge these outlandish rates. They don’t the manufacture does and as for me I would rather pay a one time 50-100 than 10-20 extra dollars a month on a 4G data plan. I think companies like htc, Samsung and Motorola are going to be forced to lower rates here in the next year as tablets become less and less money people are going to really see that these devices don’t cost this much to manufacture and these outrageous prices on subsidized phones bring money in droves to these companies but we really don’t have much room to complain if we keep lining up to get these phones by the millions and multiple times a year. I hope for more competitive prices, but my gut tells me (especially if the FCC lets att scoop up tmo) that we will see higher and higher prices as we go along. For me I will be in line with most of you waiting for the next Google phone.

    • Just an fyi Wi-max is 4G just not a fast as LTE, AT&T and T-mo are the only ones with “fake 4G”. Agree with the rest of your post. 

      Lol at people and their ADD these days

      • Anonymous

        wimax is fake 4g and you get it about nowhere.

      • angermeans

        I guess ultimately your right but clearwires pathetic wimax network that hasn’t seen a single new market in months is hardly a 4G network even for sprint. They know this too and this is why they have cashed in as long as they can as being “America’s first 4G network” and ultimately their customers will feel it when they make the change to lte and the phones they are still 16 months in contract with won’t be compatible. That to me is why I called it fake as it was done out of despiration kind of like the betting the whole companie on the iPhone 4s when other like Verizon merely offering the iPhone as an option along with dozens of android, blackberry and soon windows phone 7 devices. There is a giant difference esprint needs the iPhone (that’s actually arguabke as they have been doimg great without it lately in my opinion) and apple needed Verizon.

  • It must be because it costs so much to license Android and put it on the phones. 

    (This started off as a JK comment since Android is open source and free but now that I think about it, Microsoft charges the OEMs for Android so I guess it isn’t free…)

  • i really wish google bought that700 mhz band…i would love to sell my soul to google for a full on digital utopia…

  • i really wish google bought that700 mhz band…i would love to sell my soul to google for a full on digital utopia…

  • While I wish the phones were cheaper, and I would like to pay less than $300 (especially if they bring the 16GB version), it is true that there is a stunning level of design and innovation in these tiny devices.  I would like to see how the $150-$200 figure was arrived upon.

    I suspect with R&D, it is more expensive.

  • Anonymous

    I’ve mentioned this before, but cell phones seem to be the only consumer electronic where the MSRP rarely drops when a phone is phased out.  The only price that drops is the contract price.  The only place to get it cheap is via ebay or craigslist, but never through the retailer directly.

    I personally don’t mind paying the 2-year contract price (I prefer 1-year contracts though, but no more on Verizon) if i’m going to stick with the carrier for two years assuming that the phone can last.

    But, yes, this $299 price point is a little ridiculous.  I wonder if we’ll still see that price when phones have newer LTE chipsets in them which technically should make them cheaper.

  • Joewelker

    I read this blog to hear the latest news on upcoming verizon android devices, not to hear a brief post complaining about the cost of top of the line phones when purchased immediately upon launch. They cost that much because people are willing to pay that much.

    • Anonymous

      Maybe your post would be valid if you fully funded Droid-Life operations. It’s a community blog, opinions are one of the main points.

      • Joewelker

        I don’t have a problem with opinions, just opinions that are not well thought out. This site normally has high quality posts. This is not one of them.

  • I’m fine with paying 200 for a new top of the line device on contract, but I believe that 300 for a device just because it is 4G is stupid. The radio def doesn’t cost 100 bucks, or even 50 bucks I’m sure. (i tried to do a google search and checked ifixit.com but couldn’t find a cost for the LTE radio)

    • Anonymous

      Of course, it’s kind of like Apple charging $100 for 16 GB of memory – going from 16GB iPhone to 32GB, when we know 16 GB of flash memory costs about $10.00.  The companies cut margins at the low end, knowing that those that want the best features will pay a premium…what choice do you have if you want a high end LTE phone?

  • Anonymous

    Yeah, the way these prices are going is quite crazy, but if you think about it, your not only paying for the end product. When you buy a smartphone your paying for the cost of development, the cost to keep it up to date and so on. An xbox game disc and box costs less than $5 but why do we pay $60 for it new??? I’m getting my Galaxy Nexus on contract but it would have been nice to pay $200 instead of the $300 expected price.

  • Rizzidy

    This article was not well thought out.

    • Cmonnats23

      how so? Support your outlandish claim; dumbass.

      • Admin

        I also think it wasn’t well thought out. My main reason is that the author basically lists all these complaints, yet in the end says he will stay pay the market price for the service. Its like me saying that iPod is so expensive and blogging about it, yet still buying it on launch day!

  • Sp4rxx

    The 4G phone is not going to cost me any more than the 3G OG that I bought 2 years ago.  It had the $589 price tag as will the future phones (that are top of the line).

    With promotional discounts and NE2 and all that, I only ended up spending about $150 for my OG.  Granted VZW did away with NE2, but am sure they will continue with other forms of discounts in some fashion.

    Though I agree that $589 non-contract is OUTRAGEOUS for a device no bigger than a gamepad and that is out-dated 6 months after release, but if you sign a contract, those prices aren’t as high as you might think.  Besides, VZW (and I’m sure all the other carriers as well) make their money on accessories, not the retail price on the phone itself.

    How many people ACTUALLY spend over half a grand on a phone w/o contract?  Not many.

    • Don’t say you’re sure because you’re really not. There are no more discounts similar to NE2. The only thing you get is the primary line gets an early upgrade, which isn’t new. Plus, they make most of their money renewing contracts and signing new ones. they make some money on accessories.

      • Sp4rxx

        I worked (a very short while) for VZW and they markup on accessories would floor you.  A simple bluetooth headset (not anything special like stereo or music streaming) cost the consumer $60.

        Brand new in a non-carrier store, that same headset sold for $25.  That is too much of a markup and that is A LOT of profit.

        • right be you should know that upgrading and signing new customers are what you really want to go for. Thats where they get their money. It’s common sense. Which makes verizon more money, 2 year contract for $90 a month, or a car charger and a case?

  • JCopernicus

    Someone is in a bad mood.

    The $530 price point has been standard for nearly a decade.

  • What pisses me off is the fact that these 4G phones retail for the same or even less than the 3G phones did a couple years ago (or maybe even today still) but the 3G phones were still $199 when released, yet now with 4G, they’re tacking on an extra $100. Doesn’t make buying off contract sound so bad. 

    • Sounds like Big Red’s (and every other carrier’s) exact thought process.  That means another 300 bucks in their pocket.

  • Todd Voss

    i think the high price tag is for the amount of power they pack into such a small device. sure they are getting bigger as time goes on but think of everything that can be done on a smartphone now.  while its not that practical to use a smaller device for all the things they can do I’m sure it is invaluable to many people out there these days.  but regardless, i agree. they charge way too much considering the contract cost.  should be free if you factor that in really. full retail should be the 2 to 300 dollar price tag.

  • AM

    Part of the problem is that you can’t get the subsidy if you buy used – Say you buy a Droid X for $150 off Ebay, but you’re willing to commit to two years of service. Verizon isn’t gonna cut you a check for $300, the amount it subsidizes the Bionic and others.

  • Absurd

    F that!  PRIMMMMMMMEEEEEE!!!!!!!!!!!!!

  • Coaster36

    Where did you get the information that it costs only $150-$200 to produce a phone? That is incredibly low. Research and development, and marketing all cost lots of money, they have to recoup that money in the sale price of a phone. 

    • wow is your nose brown….wtf man…

    • Anonymous

      Valid points.  But if it’s possible to produce something like a full-fledged computer at a price point below what many of these phones are at full retail (and those computer companies have research, development, and marketing costs along with employee salaries), the markup on these phones still seems a bit high.

    • Anonymous

      The BOM(bill of materials) cost is not the total cost per device. 

  • I think 199$ without contract and Free with contract …that would be fair deal
    above 200$ of any phone with our without contract is too much…come on it is just a phone after all

    • Billy Jenkins

      its not “just” a phone. the phones from 2004 were “just” phones. Now they are phones, media players, dictionaries, mini computers, cameras, wifi routers, tv and dvd remotes, mouses for laptops, external hard drives, and much more. But thats if you choose to download an app for all of those features. My laptop cost $1000 and can’t even do everything my phone can do. My $200 phone is even faster then my $1000 laptop. So I’m curious how $200 for a smartphone is too much.

      • wawo…so laptops are useless now…??

        • Billy Jenkins

          almost every android phone has the same features that every laptop has plus a few more. Even the OG droid which was released in 2009 has the same features as laptops but they keep releasing phones with even more features that that. So no laptops aren’t completely useless yet but they will be soon. they will always serve that purpose of having a really big screen and a cd and dvd drive but with everything going digital it wont be long before cd and dvd drives become useless. and android tablets aren’t that much smaller then laptop screens so it wont be long before that becomes useless also.

      • Your laptop can do a lot of things your phone can’t do though. They not mutually replaceable.

        • Billy Jenkins

          no. My phone can do everything my laptop can do and more. But my laptop cant do everything my phone is capable of doing. Even the new laptops can’t. Think about it. My laptop and the new laptops have homescreens where u can put icons u use the most. On laptops u can listen to music, watch movies, install and play games, browse the internet, use instant messaging programs, and video chat. My phone can do all that plus text, call, and take pics. and its small enough to fit in my pocket. the only thing my laptop can do that my phone cant is burn cds and dvds. But u can buy a cheap dvd burner for only $40 and a cheap laptop for $280. So if smartphones were cheaper then $200 then when u buy a new laptop u would basically be paying a few hundred dollars for a dvd burner since thats all it has that a  smartphone doesn’t have. so yea smartphones kinda do replace laptops.

          • Jake

            Then you must have a really shitty laptop. My laptop (which I got for $299 at Office Depot) can do more than my smartphone, and it can do things a whole hell of a lot faster than my smartphone. My laptop has a lot more internal storage, several full USB2 ports, etc.. It runs Photoshop and other apps that require too much power for my smartphone to run. Even borrowing your example of DVD burners being cheap; it’s not about the cost of the drive, but what my laptop can do with it. My laptop re-encodes DVDs and Blu-Rays, edits videos…my smartphone can’t do that. My laptop allows me to comfortably view and pictures and movies on the large screen; my smartphone’s screen is small (and if you’re smartphone has HDMI out, are you going to carry a mini-HDMI cable and a large HDTV with you everywhere?). Yes, smartphones are amazing devices, considering what they can do in such a small size. However, let’s not get stupid by saying that they can do everything and more than what a laptop can do.

  • Rob

    I get kinda annoyed thinking how much off contract prices are and then a report from iFixit has your latest and greatest device costing less than $150 to build.

    Yes, it’s cheaper because the manufacturers order millions of components but still it sucks to pay so much off contract. $400 should really be the maximum cost (assuming it costs less than $200 to build).

  • Guest

    Couldn’t agree more. It doesn’t make sense that we can go out and buy a tablet for $300-$500 with no contract when essentially it’s just a big cell phone. Yet we have to pay that same price for a phone WITH a 2-year contract. 

  • trevorsalienarms

    Has this actually just now dawned on anyone? The markup is crazy high, and it will to continue so long as there’s evening news-worthy mile-long lines wrapped around Apple and Verizon stores to get the leatest/greatest technology.

    Basically, we all want the coolest stuff and then supply/demand takes care of the rest. Look how quickly the prices of those Droid models that didn’t sell so well dropped….stop buying them and the price goes down.

    I will of course become part of the problem when I purchase the Galaxy Nexus at full MSRP ’cause I’m in the middle of my current contract….sigh.

  • Anonymous

    We just talked about this in my econ class today, weird haha.

  • Anonymous

    I agree….I am KEEPING my OG for 2 more years just to spite VZW, and not give them more money….I think I can make it last!
    breaking out the duct tape now…
    Who’s with me????

  • Concerned Citizen

    1) If you don’t like it, don’t buy it. Or try to convince a company to sell you something for less than they know you’re willing to pay. Good luck.

    2) The “expensive contract” you’re locking yourself in to is for service you know you were going to pay for anyway. The contract is effectively meaningless.

    3) Are you seriously comparing the price of the very latest cell phone technology to game console technology from 2005?

  • Jason Purp

    Anybody else buying the Galaxy Nexus at full retail price?

    • Crazydog

      *raises hand*

    • Anonymous

       just curious.. why would you want to buy it at full retail price unless you are forced to buy one because you are in a contract?

      You obviously cannot use the phone on other networks right?

      • Anonymous

        …or because you don’t want to sign a contract and be locked into a specific carrier for two years.

        • Sundar Ganapathy

          though, to be fair to verizon, no one is going to have an LTE network that can compete on coverage and speed for at least a year and a half – so not much of a reason to leave.

          • Anonymous

            That all depends on where a person is living and what that person’s needs are.  And there are other reasons why someone might choose to leave, such as price.

            But for most people who visit a site like this, buying phones off contract isn’t for any of those reasons.  It’s because they want the latest and greatest and don’t have the option of buying at the contract price because they’re already locked into a contract.

        • Anonymous

           if you don’t use your “full priced” phone on verizon for 2 years at least.. then what is the point of getting the phone at full price? Like I said.. most likely you won’t be able to use it elsewhere.

          • Anonymous

            The point is because you want the latest and greatest.  Then, when something else comes along that’s better, you buy it and sell the last one.  You’d be surprised how little the phones end up costing if switch out frequently. There are a lot of people who want a high end used phone in good condition off contract for a variety of reasons.

          • You rarely can sell the phone for more than 50% of the retail full price when it’s a few months old and it’s not a cutting edge any more

          • Anonymous

            UNLESS it’s an iPhone… (LOL!)

          • Yep, because iPhone hardware rarely changes

          • Anonymous

            That depends entirely on the phone.  As long as there are no major bugs with it, a fairly cutting edge phone with a $500 retail value will easily go for between $300 and $350 up to four or five months after release, well over 50% of it’s value.  It all depends on where you sell it.

          • Spc Hicks09

            That statement is just completely wrong. People do it all the time.

          • foreWard

            I sold my charge 3 weeks ago, used, for $350 on ebay in 24 hours…..so a little better than that.

        • Anonymous

          I’m curious about this. I hear this a lot, but I’m curious about the reality of it. Don’t get me wrong: I totally understand the sentiment in theory, and I am by no means trying to attack those who express it. For me, though, the reality is that I am going to be using a cellphone on a daily basis for the next two years; there is no value to being able to periodically enable and disable my plan. Also, I will most likely stay on VZW for at least a 1year period, at which point the discount will have likely outweighed the ETF. 

          The only scenario where I could see carrier lock-in being a concern in reality, rather than merely in principle, would be for someone who likes to periodically jump carriers (presumably kinda like some of us like to switch up ROMs, just for the heck of it). Are there people like that out there, who change carriers more than once a year on a regular basis?

          • Anonymous

            Besides being able to periodically enable and disable the plan (which is useful for people who leave the country for extended periods at a time, like myself), there are as many different reasons as there are users.  It could be because they move around quite often.  Within the country, coverage is quite different, so they might get better coverage with one carrier in one place and better coverage with another carrier somewhere else.  Or maybe they don’t know where they’ll be going next and who they should go with.  Some people just don’t like the idea of being locked into a contract, and they don’t have any other reason for it.  For me, it’s the moving around part.  Some places I want a Verizon phone for the coverage.  Some places I want an AT&T phone.  And sometimes, when I’m out of the country, I don’t want a plan anywhere in the states.

            Are they reasons that affect the majority of the population?  Not at all.  But for some people, a contract is more of a hassle than it’s worth.

          • If I could do it, I would. I’ve got a friend who enjoys that kind of flexibility on the cheap thanks to Google Voice, prepaid SIMs, and a souped up quad-band HSPA+ Android phone. If the Verizon Galaxy Nexus included the pentaband HSPA+ radio alongside the dual-band 1xEv radio and the LTE radio, I’d buy it and use it to jump carriers all the time.

        • Well, ETF + subsidized price <= full price anyway 

          • Anonymous

            Disagree… $300 + tax + 350 > $(550 thru 600) +tax

          • I think ETF is prorated, isn’t it?

          • Anonymous

            Partially. If it were prorated, it would get down to $0 at the end… it doesn’t even get close. I believe it gets down to about $135 or so at the end of your two years… so no, not really prorated.

      • Anonymous

        Don’t want to be locked into VZW, although the ETF is turning out to be a cheaper option lately.

      • Jason Purp

        I don’t have an upgrade available for a long time. And I want this phone badly. If the full retail price of the 32GB Nexus is $600, I will be buying it (although I doubt it will be that price, I just really hope. I sold so many things).

        • Anonymous

          you still have your kidney?

      • Dan

        If you do not have an upgrade available or you are not looking to be locked into an additional two-year agreement, then buying a device off contract is quite attractive. 

      • Dan

        If you do not have an upgrade available or you are not looking to be locked into an additional two-year agreement, then buying a device off contract is quite attractive. 

      • John

        some people are just rich =

    • Sundar Ganapathy

      yep..selling a thunderbolt and a droid x though.

    • Anonymous

      Hard to pass up such an unbelievably amazing phone, but yeah the price sucks…especially when you realize just how quickly all that money will become useless (as phones become outdated so rapidly it becomes a necessity to upgrade very frequently). Personally, I’ll be the guy at the front of the line at Verizon on Nexus launch day screaming “Nexus on Verizon!” Nexus on Verizon! Finally!” over and over…

      • Anonymous

        I’m wrestling with the thought of buying the GN. On one hand, I don’t NEED it right now and I have something else I’m trying to save for. On the other hand, I want to support the idea of a Nexus on VZW. If they don’t sell enough we’ll never see another one.

      • Matthew Morrison

        what is the advantage of buying it at full retail price?

        • Anonymous

          Some have to buy at full retail because they don’t have an upgrade available.

        • akhi216

          You can have a lot of things be convenient for you buying a phone at full price if you have the extra money to do so. You can have the phone you have now be backup phone in case your phone gets damaged, stolen, or bricked beyond your geek IQ. You can switch to a slider phone from a touchscreen phone to type über-long email. If you have a 4G LTE MiFi/Hotspot line, you can insert the 4G sim card into a phone that you bought full price and have an Android-powered iPod Touch Killer; of course you can’t make calls or text via VZW’s network doing this because the 4G sim for the MiFi/Hotspot is not provisioned for voice/texts…but that’s what Google Voice takes care of. You can then buy a prepaid phone with unlimited everything for cheap, or just get a couple of minutes if you don’t talk much, and then pull out your “Adroid Touch” iPod Touch Killer when you need to keep your fix. The primary reason to buy a phone at full retail value is to be free of contracts. If you already have a line on contract you can upgrade at full retail value going from a contract plan to a month-to-month no contract plan that you can cancel at any time to pay a subsidized price for the phone that you just have to have in the future. The keyword is options; buying a phone at retail value allows you to breathe easy.

          • Anonymous

            All of that, except being free from contract, is the same whether you buy at full price or at the 2 year discounted price.

          • Cb2000a

            I would not mind buying one at retail if Verizon gave a discount (like T Mobile) on the plans. Buying one at full retail and then getting screwed at full rates is what I object to.

        • Anonymous

          If your contract isn’t up yet, or you don’t want to lose unlimited data, you don’t have much of a choice…

          • Anonymous

            You are grandfathered into unlimited data whether you upgrade at discounted price or switch to a new phone that you buy at full retail.

            The advantage would be what Kleendroid said or if you don’t want to be locked into a contract you can buy it at full retail.

        • Or if your work pays your monthly bill for you but refuses to buy you the latest and greatest phone 🙂

        • Letmehelp

          No contract..

    • bigrob60

      One last new every two discount left. Nexus will be getting it.

    • bigrob60

      One last new every two discount left. Nexus will be getting it.

      • Tyrian

        Do you still have the $100 credit? I used to for awhile but noticed it dropped down to $50 after they got rid of them.

        • bigrob60

          I think just 50 now. 150 on some phones but, like I’m going buy them w/ the Nexus coming.

        • Joe Ewbank

          Call and talk to them.  Be adamant but polite, and ask to be escalated to retention if you need to.  I did this  in July, and they gave me the full discount price – I just have to call them to get my next phone, rather than get it in-store or via the web site.

          • Emaca11

            I did this with VZW just before i switched to Sprint.  They offered me the full discount, even though I was just over a year on my first contract, to stay but I didn’t like any of the phones at the time and the OG was pretty much my kids angry birds machine.  

          • nailbombTHREE

            Can you describe what you mean by ‘retention’? I’ve never heard they had a policy like that….

          • jason6g

            customer retention. the department that has a set amount of money they can discount to keep customers. more of a triage for who is worth more. businesses, family plans, vs a single line no frills or a prepaid subscriber. this department has a bit more clout to offer discounts than the regular customer service rep. just know they dont give freebies, they are more so there to help correct some “wrongs” big red may have jipped you on – ie upgrade credits.

          • Jason Purp

            How do I make sure that I reach this department and not a regular rep?

            I really don’t want to pay full retail for this phone if I don’t need to. I probably won’t have enough money. Will they help me out or something? Do I need to make something up?

            I’ve gotten reps to give me phones at upgrade price before, because of legitimate problems, but now it’s just that I can’t pay full price.

          • Stormin Norman

            That’s not how it works.  You don’t get the discount just because you know the name of the department.

          • Anonymous

            It’s the department you are sent to when you threaten to leave.  There job is to make you stay.

          • nailbomb3

            Thank you sir!

        • jason6g

          sounds to me like a line on your account used the upgrade credit. they were at 100 & 50, then 50 & nothing. pretty sneaky as most people did not notice the change.

          my opinion, if the cellphone plans were cheaper when buying full retail i would be happy. this way those that wish to have a new phone more often may at their discretion, and those who tactfully “upgrade” may do so with some form of strategy and be happy knowing that compared to now they are saving money. at least makes sense for those who keep their contracts after they expire to receive a discount. consider it loyalty

        • Anonymous

          on sprint mine is 75 then 150

      • Blootzm3

        I’d pay full price on a nexus, but never on a Motorola. gotta be an idiot to pay retail for bug filled phones ie: Motorola.

        • Anonymous

          Seriously…. MOTO fudges up the android experience like no other; ie Blur.

        • None of my motorola phones have been “buggy”. I just wish the bootloader was unlocked

        • Edaking

          thats freaking retarted, NEVER would i pay $300 for a smartphone.  In my opinion it is not worth 300 on a 2 year contract.  what do you think will come out in the middle of those 2 years, something better right? maybe even the same price or at the rate these guys are going more expensive, im sorry but no cell phone is worth $300 thats just crazy, they need to price them at a fair price! im starting to think that the manufacturers that use android are starting to be a lot like apple and over price everything!! honestly i would rather wait till someone makes a ROM thats based off of ice cream sandwitch, and use it on my p.o.s thunderbolt and save myself 300 and buy something thats worth that price.

    • I don’t have an upgrade so that is why I am buying at full retail

    • Jikhead

      Not this time.  I did that for my Droid Incredible because I wanted it so bad and was only a year into my contract.  No need this time, and I get a extra $30 off plus a free months of service w/my 2yr. agreement.

    • Anonymous

      I think I am prepared for the eye watering price

    • Drayphly

      Me!!  I always buy full priced unlocked phones.

      • Anonymous

        If you are buying your devices full priced on a major carrier in the US then your just paying extra to be able to move to a different carrier whenever you desire, which, since all 4 of the major carriers have, for the most part, incompatible hardware is a useless option.

        Just about any phone you take from AT&T won’t do 3G AWS on Tmo, neither Sprint nor VZW are interchangeable at all and obviously don’t work with GSM based phones. 

        So your paying extra for a phantom benefit.

        I suppose I should be happy people like you are out there paying extra, you help to keep my cell phone bill down to some extent.

        About the only way buying retail could be beneficial is if you put your device on a lower tier carrier like Page Plus or Boost, though there are lots of caveats with that, especially regarding data limits.

        • Jey Wright

          I agree with you completely. I’m on Page Plus which is actually a VZW subsidiary and the voice service ids great, BUT they rape on the data plan though. What the hell is 20MB of data on a $44.95 unlimited text & voice plan? But if you get the 2000 minutes and unlimited text at least they give you 100 MB. Still ain’t dick if you want use the full extent of your smartphone.

          So many of us spoke up about the locked boot-loader on smart-phones, now they’re kissing our asses and some companies ( Thanks HTC) built some without them being locked to please us. Perhaps if we raise enough hell and picket in front of Big Red and the other wireless carries like the 1% that’s staking out Wall Street, we may have a chance to get what we want.

          In reality, they built these devices knowing full well we all cannot wait to screw up our credits and go broke buying the freshest device that come screaming out of the gates of technologies bosom. Hell, who wouldn’t want a Galaxy Nexus? I got wood just by looking at its debut the other night, not to mention the replay value YouTube is getting because of them. The “higher ups” knows exactly what they’re doing and they’re playing us all like a hooker on whore’s row with these absurd device prices.

          To make it plain: Any new device (4G-7G) should be no more than $199 her device. Let the manufacturers recoup their funds via the wireless carriers. No human should pay more than what each device is worth. Wireless service with NO contract should be no more than $80 per moth for unlimited talk, text & web. Why in the hell should anybody keep scores on text & MMS usage anyway? Who does this?

    • Anonymous

      That’s The CRACK !!!!  ANDROID CRACK THAT IS !!!! 😛

    • Anonymous

      I will be.  Is it still going to be $549?  Please tell me yes as I just sold my DX on ebay and am now using my wife’s old BB Curve.

    • Graham Cluck


    • jbonics

      idiots guide to buy a smartphone: you buy a new smartphone, before it is a year old sell it (metro PCS pays top dollar, online a little less. $100-$150.) THEN go buy that new phone online for $199-$299 (same price as w/2yr. contract……..if you cant find a nexus prime for $299 off contract your a tard) make sure its a quality website and the phone is unlocked

  • yeah…i agree.  I want my galaxy nexus very bad.  I’m not sure if I will have enough money though…200 I could swing without even thinking about it.  but bump it up past that and I have a real problem allowing myself to splurge

  • research and development is pretty expensive

    • Anonymous

      I also think that the cost quoted do not included the cost to assembly components and deal with broken ones.

      It assumes the cost of the phone is just the cost of the individual pieces.

  • manderko

    I would say the “magical” $199 price tag is a fair price for a phone that costs 150-200 to make. And off-contract price is to entice people to be ON contract. I remember paying hundreds of dollars for a Sony Clie PDA. We are paying hundreds of dollars for computing capabilities that were non-existent only a few years ago. There are cheap phones, I suggest you get one of those

    • Anonymous

      Wow, you brought me baaaack with that one… It was my first PDA, because I hated palm pilots!

  • Bradley

    “These prices are absurd, why do we continue to buy into them?”comma splice

  • Tom Luley

    A smartphone is something you use probably more than everything in one day. I think even $300 is worth it to be honest, especially since its for 2 years of use…I use my phone way more than my Xbox, laptop, or even TV.

  • Foamposite0o1

    Valid point. Cell phones are ridiculously over-priced when you compare it to those other items that costs much less.

    • Billy Jenkins

      but those other items that cost much less also aren’t used as much as a smartphone. Most people who own a smartphone tend to use their smartphone alot more then anything else in their house. When you are inside alot of people text or call using their smartphone. They even browse the internet or play games or listen to their music using their smartphone. Some even do all that while using a video game console or watching tv. But then when you leave your house you can still text, call, brose the internet, play games, or listen to music. Its alot easier to carry a 4 inch phone outside then it would be to carry a video game console and even use it while walking around since that would require a tv and something to plug them both into for power. Thats why phones released in 2011 cost more then game consoles released 5-6 years ago.

      • Anonymous

        You can’t justify pricing something based on the number of ways it can be used. If that were the case, your car, or even a space shuttle, should cost less than your phone.

        • Billy Jenkins

          no because cars and space shuttles can do something that a phone will never be able to do. which is transport u anywhere on the planet and alot quicker then walking. but even some cars have some of the same features that smartphones have like a gps an mp3 radio, and even a built in phone with bluetooth. some cars that cost extra even have built in tv screens with dvd players. and a space shuttle is so expensive that it isn’t even sold in stores because it has the biggest use ever. which is transportation to space which is more then enough to cost thousands or even millions. so yes I can justify pricing something based on the number of ways it can be used. If they released an android phone with no physical buttons except a power button and the only touch screen button was used to make calls and it didnt do anything else then u think it would sell or even cost as much as the Bionic or droid 3? Probably not since the bionic and droid 3 can do tons more then a phone with only 1 button and 1 feature.

        • DismalScientist

          Econ 101: In a perfectly competitive market, the price of products is marginal cost plus the (small) average rate of return. The utility of a product is irrelevant, when multiple firms can enter the market and compete prices down to marginal cost.

          Corrollary: The mobile market is very far from a perfectly competitive market. The PC market is much closer to the market of economic theory, with low margins/markups.

  • They are arguably the most useful electronic device one buys, no?  Camera, planner, phone, pocket dictionary/thesaurus, gps, kindle, etc…

  • Anonymous

    So you promise you’ll pre-order for 300 bucks the moment it becomes available and yet you ask us why we continue to buy them?

    Though I think mobile phone prices are exorbitant.. I believe there are other things that factor in. Today’s mobile phone replaces a bunch of devices.. I see it as we paying a premium for the luxury for having a one-in-all device.

    More than the device itself.. we should think about how these carriers are screwing us because in reality it costs the carriers A FRACTION of what they charge us.. to upkeep their airwaves and make a decent profit.. and yet they screw us every which way.

  • Mr ilheis

    We do it to be connected and on the bleeding edge of technology. Supply vs. Demand

  • Anonymous