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Hey Verizon, AT&T Announced Two 4G LTE Devices Today – Why Are Yours So Much More Expensive?

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I never like to start off a Monday with this sort of tone, but when AT&T announced its first two 4G LTE handsets this morning at prices far below what Verizon has been sticking us with, it rubbed me the wrong way. There was a time when the argument that “LTE radios were expensive” was semi-acceptable, but no longer is that going to fly now that AT&T and their arguably far superior radios aren’t making their prices skyrocket (see what I did there).  

The HTC Vivid and Galaxy SII Skyrocket are both top-of-the-line phones with their dual-core processors, big beautiful screens, and dual cameras, yet will be available at $199 and $249 respectively. You may remember that the Thunderbolt with its single-core processor and 2010 specs was delivered to us in March 2011 at $249 followed by the Samsung Fascinate DROID Charge at $299. Think about that for a second?

If the price hike to well above $200 was because LTE radios were expensive, then why has AT&T managed to keep theirs down? And remember, AT&T is claiming that they waited to produce LTE phones until they could include radios with “circuit-switch fallback” technology that would allow batteries to last longer than the 4-6 hours that most of us experience on a daily basis. This tech is an all-in-one radio that works far more efficiently (according to AT&T – makes sense though) than Verizon’s dual 3G and 4G radio setup that requires each radio to be powered separately (hence the poor battery life). So not only is AT&T using better tech, but they are keeping prices down while still releasing top of the line smartphones.

“But they are only in 9 LTE markets! 15 by the end of the year!” Which I understand. Verizon had far more markets live when they released their first phone. Could it be that Big Red was trying to offset the cost of their rapid LTE rollout by raising prices of phones? Could very well be. I guess as a consumer, I feel a little robbed by that method, especially when it appears that AT&T will not be going that route. Then again, how long will take for another carrier to cover half of the country with these speeds?

What about the batch of phones we expect to see in the next month, though – the DROID RAZR, Galaxy Nexus and HTC Rezound? All have been pegged at the $299 price point. But remember, that all of these phones (at least to our knowledge), will still run first-gen 4G LTE radios, meaning battery life is still going to be an issue. So we get older and less efficient LTE tech than AT&T is using, yet have to pay higher prices because of a bigger network footprint? Man, that’s rough. I guess the trade-off here is that you actually get to use LTE with your $299 phone, while AT&T users could be waiting a couple of years to ever use theirs.

*Note – A lot of people pointing out (which I also did two paragraphs up) that this is likely all about actually having an LTE network in more than just a handful of markets. I totally get that argument. But at the same time, no one seemed to have that argument when Big Red initially launched with far less markets than they have today, but with 2-3 low-end devices at $200+ prices. We also weren’t sure what was fair pricing though. As some have suggested, maybe we helped decide that “fair” price by purchasing the Charge at $299. I think what will be the thing to watch here, is as AT&T rolls theirs out, if prices from either carrier are adjusted. Also, we know that AT&T’s 3G network is not of the highest quality, but we cannot say the same for their LTE network at this time.

The price we pay to be early adopters and have the best network, I guess. Any thoughts?

  • Mike_Jones

    That is the beauty of the free market.  There is no such thing as something being “too expensive”.  If you don’t like it, don’t buy it or get it from someone else.  Or if you really don’t like the prices people are charging, DONT GET A SMARTPHONE!  we all survived without them until the past couple years!

  • Anonymous
  • Anonymous

    It’s a free market, if people are willing to pay the premium for Verizon’s phones then Verizon can charge it. When they start losing business because similar phones are cheaper on AT&T, they will change their strategy, but with all we pay for calls, texting and data today, the cost of the phone is really a small percent of our mobile access cost, whether it’s $299 or $149…the difference is only $6.25/month over a 24 month contract. 

  • Anonymous
  • http://www.facebook.com/profile.php?id=667432104 Albert Kilger

    Haha I love my 3G still.  I am in the 3G market yet, and I can’t complain with 1.8 MB/sec downloads.  That’s faster than my broadband at 960/1000kb/sec with all the computers and such attached.

  • Justin Kos

    i think ATnT is trying to catch up to verizon

  • Bryan schultze

    I would like to point out also that ATT usually doesn’t give any memory cards with their phones and if they do its only 2 gig. The thunderbolt came with a 32 gb card and so did the charge. The Bionic came with a 16gb card but came with 16gb on board. Even ATT on board memory isn’t as good. There is some of the expense! Oh yea and just like you said, I can use Verizons 4g. Att wont be all up till 2016. Who wouldn’t pay $50 for now and the best reception.

  • http://twitter.com/snakedoc SnakeDoc

    AT&T…. $50 bucks…. not worth the risk

  • T0ked

    I paid $150 for my thunderbolt. And the droid charge dropped in price after a month or two. I’m fine with letting the early adopters pay the sky high prices and get all the glitches worked out. prices on VZW phones drop fairly quickly for both new and renewal customers (not the same thing I can say for att customers). I’d rather pay the extra money for service I can use everywhere, even inside my house. In NYC, dead space and poor signal for the other carriers is pretty ridiculous for such a large metropolitan area.

  • CyberDude

     Everything Verizon does is more costly than any other carrier, they have to be making far more $$ than any competitor, but as many have said they can afford to build out a lot faster.   I could easily save $60 to $80 a month if I left VZW and went to Sprint, maybe even more if I went to T-Mobile, and trust me I am considering it, but debating if the loss of a lil coverage is worth saving a grand a year..

     As to the LTE costs being higher, they have to have a CDMA and LTE radio in the phones, as will Sprint, but ATT and Tmo will be able to have integrated GSM/LTE radios as they are based on similar tech.  Should for sure be a cost and compatibility win for ATT and T-mo, if they build a good network..
     

  • tacos

    For folks that keep claiming that Verizon’s implementation is different please read below.

    http://gizmodo.com/5849355/att-says-its-lte-phones-will-be-slim-and-easy-on-the-battery

    Both companies will use almost identical LTE intially.  AT&T claims their switching will be better, however a possible fw update to Verizon LTE handsets may increase battery to same levels claimed by AT&T. AT&T is claiming, but not proven as a fact per who it counts…  that would be us the customers….  AT&T will be a winner if they provide a 20% additional battery life.  Sprint is going down the same road with their LTE.  It will take a few years for LTE to be homogeneous.  However having the ability to fall back to legacy networks is a plus as was the case when Verizon’s LTE network went belly up a month or so back.

  • Anonymous

    Phones are cheap as long as they’re under $1,000. I use these things much more than any electronic computing equipment I own. Worth it.

    • Anonymous

      You’re an idiot.

    • Anonymous

      Following your logic, a bottle of water is cheap as long as it is under $1,000 since it is used more than any other liquid we own.

      • Anonymous

        That’s just a side note. But yes, sometimes I wonder why I spend thousands on entertainment center parts and computers that I use less than an hour a day on most of the time.

        The logic is that top shelf smartphones at all the countries I traveled to and lived in are around a thousand, and people around the world had no problems paying for them. They make less to way less than we do here.

  • Anonymous

    I’m all for lowering the price of 4G phones on Big Red, as I’m sure many of you are also!  Fact of it is, Verizon can charge what they are now and be fine with it bc of their superior network and bc people will pay 299 on upgrade. That is why we have sh*t opinion on the matter. It’s to late now, we’re already here boys.

  • John Crisp

    To be honest, I do not care that the phones are $300. They are worth every cent!!! These phones are fast as it is, but add Verizon’s LTE, and its like getting FiOS Internet at on your phone! Well not the 35up/35down I have at home but its by far the fasted I have used on a phone and its solid!!! Its no longer a bear to upload pics, vids in 1080 from your phone to facebook, this stuff happens in seconds. Music downloads almost as soon as you hit the buy button.. My Bionic amazes me every time I use it!  I go all day on 4G with 3 email accounts, check facebook, look at some vids, phone calls, txts, emails, and whatever else I want and I go all day…Hell, its 8:50pm and I still have 30% battery since it came off the 8am, 12 hours and sill have battery????

    • Justin Kos

      stop thinking like this because its people like you who keep the price at 300, we are the consumer and without us verizon no make money =(

  • Jeffrey Garcia

    I love Verizon, and currently use an AT&T phone. I love it. I pay $50 for a lot of minutes, 2gb of data, and unl. text messages. Everyone complains about bad service, but i get far superior results than my friends that have sprint or verizon. Even though att only has 9 lte markets, they will expand. Their LTE network is much faster than verizons and their phones are really good (and cheap!) I will stick with them getting fantastic coverage and very nice phones.
    Verizon just wanted to be first in the LTE game and therefore their phones have awful battery life and are very expensive. Im glad im with them as they waited for the perfect time to get it right the first time.

  • http://fujibayashi.jp/ Gasai Yuno

    I’d like to remind that unlike AT&T and all other “regular” LTE carriers, Verizon doesn’t use LTE for voice communications.

    What I mean is, with a GSM carrier you have the old lineup: 2G, 3G, 4G — usually in a standard issue universal transceiver that is backwards compatible with the network. If the network supports LTE, it will use LTE. If it’s UMTS, sure. If it’s just GSM, why not. Downshifting is not an issue for any GSM phone; they switch between 2G/3G/4G seamlessly and without connectivity loss. Moreover, all those — 2G, 3G, and 4G — carry voice and basic text messaging (SMS, not MMS) when we’re talking classic GSM.

    Verizon instead uses a hybrid CDMA+LTE network, that relies on CDMA (non-EV-DO, non-1x) for voice and text message transfer. Only MMS is transferred over LTE, otherwise it’s reserved for mobile data only. Thus, with a VZW phone, both transceivers — which aren’t even using the same technology — have to stay powered on if you want voice and data together. So while a classic GSM/LTE phone on LTE uses LTE only, a VZW LTE phone cannot avoid using CDMA at all — if the user still wants to receive calls and text messages.

    It’s not about “new technologies”, it’s about poor network design.

    Then again, it’s pearls before swine…

  • http://pulse.yahoo.com/_UF6BV4CKEKIGNVLGSYTOYP2HVA Allen

    LTE is GSM.  Verizon has to use TWO radios in their LTE phones, and AT&T can get by with one.  20-25 bucks for added chips.

  • Eric V

    Stop your bitching a complaining you pay more at verizon but get better speeds pay less for AT&T get drop calls, shitty speeds YOU GET WHAT YOU PAY FOR. 

  • Steve

    Asking Verizon to lower prices on your Android blog is cute, fun and possibly exciting but will do NOTHING to actually lower prices.  Prices on Verizon top tier Android phones will come down only when market pressures force them downward.  Free markets rule!  If you don’t like the high prices then switch to an inferior network.

  • BroRob

    I know I’m not going to change anyone’s opinion, but here
    is my 2 cents!! I have a TBolt as my personal phone and a Sprint MoPho as my
    work phone. Verizon’s 3G speeds kill Sprint’s 4G (when I can get 4G). I am
    willing to pay the extra $$ for Verizon because of the lack of BETTER options
    out there. You might think a little slower phone is an acceptable alternative until
    you are stuck with it. I can’t count the number of times I’ve switched to my
    personal phone because Sprint was soooo slow!

  • http://twitter.com/JeraldFitz88 Jeremy Miller

    If you live in a good at&t area you have a better fallback (HSPA+) and the at&t lte will be be better at peircing buildings due to the frequencies.

  • Anonymous

    I look at it this way. If they subsizide a phone that costs $215 to make in parts are they REALLY subsidizing that phone at all? I imagine most manufacturers are doing bulk discounts – except Apple. Verizon has really been putting the wood to its’ customers this year.

  • http://www.facebook.com/people/Rahul-Nirmal/37517471 Rahul Nirmal

    I am curious to see the SpeedTest.net results for ATT’s phones.

  • http://www.facebook.com/michael.suriel Michael Suriel

    What happened to $200 being the max regardless of how good the phone was? 

    All kidding aside, I think that the max for the high-end phones that we have now a days should be set at $250. Just look at the the Pantech Breakout, HTC Thunderbolt, LG Revolution, and Samsung Droid Charge. Do you see any major differences in specs. No. They are all 4G LTE, 1 Ghz SINGLE CORE devices yet as of right now all of those phones cost $99, $149, $199, and $199. 

    Verizon finally did something right when they made the Breakout $100. Because how are you really going to charge $200 for a phone with last years specs? (rhetorical question) I still don’t understand why Verizon hasn’t brought down the price for the Charge and the Revolution btw. 

    I just hope that Verizon realizes that they can’t continue selling phones for more just because of 4G because 4G is going to become the norm in about a year or two. 

    Also, $299 for the Bionic, Razr, and Nexus is ridiculous but i still don’t care enough NOT to get the Nexus lol.

    /endrant

    • Anonymous

      Why would a company want to set a max price though? I obviously don’t want to pay more for a phone, but Verizon, AT&T, Sprint, etc. are not in business to provide us cool phones but rather to MAKE MONEY. Only if WE, the Android-consuming community, refused to buy devices over that price would Verizon choose to implement such a policy.

      As long as we consumers flock in droves to stores and sites to buy up every last Nexus, Rezound, RAZR, Bionic, etc then they can and will charge whatever they want.

  • Mark Christian

    They’re charging $299 because they know people will pay it.  I know, I know… blasphemy, but look at the iPhone, they’ve really set the bar for pricing.  Really though, what’s $50 for a top of the line device?  Sure I’d love to save 50 bones, but over the 2 years you’re stuck with the phone it equates to $2 a month.
    My only problem is when they drop support for a $299 device. At least Apple realizes that if people buy a device from them, they need to stand behind their product.  Yes, they only have 1 product a year, yes it’s only one OS, but it seems to work VERY well for them.  Samsung, Motorola and HTC could learn a few things about providing timely updates and support.

  • Anonymous

    I agree that Verizon charging extra for LTE phones sucks but at the same time as long as that money is going to making their LTE network bigger and better I am fine with it. also saving 50 bucks on a phone isn’t worth a lesser network.

  • jb

    It’s been a while since I looked into this at all so my memory could ABSOLUTELY be failing me on this – feel free to correct me if I’m wrong.

    But, isn’t AT&T’s 4G network supposed to be slower (substantially slower in fact) than Verizon’s 4G network?

    For so many that criticize the Thunderbolt – one thing I’m happy about.  I bought mine on launch day which means that when upgrade times comes around next year, there should be a very nice variety of phones to choose from which will hopefully be the second generation of 4G phones meaning battery life shouldn’t be an issue.  All we have to this point are incremental improvements. In fact, it’d be nice if this time next year, there’s another Nexus device – that’d be one heck of an upgrade!

    • http://fujibayashi.jp/ Gasai Yuno

      Well, AT&T is deploying LTE. Verizon is also using LTE. Thus I’m not quite sure why you are stating that LTE is substantially slower than LTE.

  • Jcost82

    whats going on with this site? it used to be a great place to come and get information about upcoming android products. now it appears to be a forum for its creators to stand on a soapbox bitch, moan, and stir the pot. Verizon has always been top of the line when it comes to quality. they do not cut corners when it comes to network. I for one dont mind paying a measly $50 more for a phone knowing it will work pretty much anywhere. thank god this is a free country and anyone left “rubbed the wrong way” can switch to at&t be stuck on an inferior network, but hey at least they saved $50 on principal. 

  • Anonymous

    Because when u r the only one in the market u charge whatever the heck u want…

    • Anonymous

      Indeed, maybe the addition of competition in the market will drive the prices back down.

  • Anonymous

    At this point, I am willing to bet that the Galaxy Nexus is released in 3 months from now on AT&T for $199.99

  • Anonymous

    The company my wife works with gets equipment and plan discounts. Her bionic was $249.99 after the discount, so i figure my nexus will be the same amount.

  • El El Kool J

    Mercedes Benz how can you charge me more for this car when i can get a Lexus with all the same features for less? 

    • BroRob

      Because the Mercedes Benz is allowed to go on the freeway and the Lexus has to use the surface streets!!

  • Anonymous

    Wow–lots of articles lately about the prices of phones. Maybe we should have a refresher in high school economics.

    http://en.wikipedia.org/wiki/Supply_and_demand

    Supply is from the company, demand is from us. If we are demanding it and paying it, then they will charge it.

  • Ruel Smith

    Folks complaining about AT&T and praising Verizon are just off the hook. I have Verizon, and I have friends on AT&T and Sprint. It pretty much depends on where you are to determine who has the best coverage. I was working at a plant where AT&T had great coverage, Sprint a decent coverage, and my Verizon had spotty coverage. I go somewhere else, the game changes.

    Overall, I’m very happy with Verizon. Pick the carrier that provides you with the best coverage, features, and service.

  • http://AndroidTaskForce.com Timmy

    AT&T has what like 5 cities with LTE? That’s why. :P

  • LiterofCola

    While on the subject of Verizon, I’ve been sitting on an upgrade credit of $100 for a few months now.  And I knew it was a hundred, because I remember logging in and checking a few times a month.  But when I recently logged on to my account, the upgrade credit has been reduced to $50?  Did I miss something?

    • Paul

      $100 upgrade discounts have been gone for well over 2 years. So unless you haven’t upgraded your phone in the last 2-3 years that’s the only way you’d have a $100 credit eligibility. They’ve been bumped down to $50 since at least the point when I got my BB Tour (approx 28 months ago).

      • LiterofCola

        But that’s the thing, I haven’t updated since I bought the OG Droid at release.  And I did see that I had the $100 discount at the beginning of this year, which I never touched.  But it got bumped down to $50?  I understand if they lower the upgrade discount to $50 from now on, but to have a $100 discount, and then have it lowered is a cause for concern.

        • Anonymous

          Yup I remember having a $100 credit and it was bumped down to a $50 credit as well. My 2 yr contract doesn’t end till Feb 2012.

  • http://nottheeternaltao.blogspot.com/ jimstoic

    Verizon’s better LTE network should arguably make their devices cheaper because greater demand will drive more production, so that one-time costs can be spread across more units. Also, Verizon has a lot more 4G devices, and the competition between providers should help keep prices down. They are just trying to make a buck.

  • http://twitter.com/Skitz_Marz Alex Gandero

    Because we can actually use our 4G in a hell of a lot more areas than AT&T and we have better quality 4G than AT&T

  • Craig

    I think the problem with Verizon is that they have always been burdened with CDMA technology. CDMA did not provide a natural upgrade path. What has bothered me most with Verizon is not their pricing but the fact that they severely cripple their devices. Kellex points out the contract prices but the sad fact is that many of us early adopters are paying full price for our equipment. As an example, with taxes the new Droid Razr is $700, yet this phone is so crippled that it will only work on Verizon’s network. In contrast one can buy a fully unlocked Galaxy S2 that is unlocked, without bloat, it weighs less than the new Razr, and it will work just about anywhere in the world. My Droid 3 is twice as thick, weighs almost twice as much, the sim was originally locked, the radio is locked, the phone was severely bloated, the bootloader was locked, and the phone cost $650. I’m not AT&T fan boy but in my opinion the networks are comparable.While Verizon has LTE in many areas, AT&T has HSPA+ in more areas than Verizon’s LTE. As an example, on this island we have no LTE but we do have access to HSPA+. HSPA+ is about four times as fast as Verizon’s 3G. The LTE speed is nice to have but it becomes useless if Verizon intends to throttle it’s unlimited customers at 2GB of throughput. At this point I will keep my unlocked Galaxy S2 without contract and I will not pay Verizon again for a crippled phone. All we can do as customers is vote with our wallet.

  • http://twitter.com/strifejester Justin Ellenbecker

    AT&T has been losing customers for the last few years.  And AT&T doesn’t work for shit where I live.  Sprint doesn’t either.  I am a former Alltel customer that got gobbled up and I am glad I did since the service is head and shoulders above everything else I see in the area.  Paying and extra $50 or $100 for something that works and is reliable is more than worth it to me.

  • ChuckDz3

    One of the biggest issues we tend to forget is that fact that these are PHONES and the number one use for these should be used a means of communication. Verizon has been and will always be a superior in call clarity and lowest drop call ratings. If you want to sacrifice a few dollars for a phone and jump on AT&T try to remember they have been the lowest ranking in call signal nationwide… I think I’ll stick with Verizon 

  • Kierra

    Simple, you suckers suck it up. 

  • http://dissertationtoday.com/research_proposal research proposal

    very interesting post! really nice work!

  • tacos

    So Kellex your touting the merits of a yet unproven companies claim of my radios are better than your radios??  Guess what since Verizon had the network they had people by the cajones.  First gen phones are always more expensive and less dependable than the successors. When there is true competition and AT&T and others can claim the same LTE coverage as Verizon and actual proof of superior tech in there phones then pick a corner and start waving the fanboy flag.  Less we not forget how much iphone on all carriers are going for.  299 for a 32g iphone and andorid phones with bigger screens and LTE are same price or less in price.  Guess what people are still buying those phones and all carriers are 3G for that device.. When the true competition is in place then vote with you wallet, pick your poison and decide which is the lesser evil.  Remember these are all business companies and they are in it to make a buck.. Don’t buy if you don’t like the price or what your getting for your money..