You can certainly try...

Posted Oct 21, 2011 19:41 UTC (Fri) by rgmoore (✭ supporter ✭, #75)
In reply to: You can certainly try... by tialaramex
Parent article: Andy Rubin: Android 4.0 to be open sourced by year end (The H)

Making the user buy a new phone every 12-18 months is bad for the environment but good for your bottom line.

I'm not even sure that's true. If you look at phone prices with and without signing up for a new contract, it looks as if about $20/month of a typical contract is repaying the cost of the phone. But your monthly bill doesn't go down when you move from the long-term contract to month-to-month, which means they're pocketing an extra $20/month. The shiny new phones are a customer loyalty or customer attraction gimmick, not a direct profit center.

You can certainly try...

Posted Oct 22, 2011 0:23 UTC (Sat) by tialaramex (subscriber, #21167) [Link] (1 responses)

Your argument makes some sense, but if I am to trust the sales & marketing people in the tiny company I work for (most of whom have experience in much bigger companies that do this stuff) they assume that most customers who aren't locked in will leave. Basically these companies aren't structured to offer good long-term contract deals, at any time there will be a competitor who offers roughly what you have now, but cheaper or better. The only reason (to their thinking) you haven't switched to that competitor is because you're locked into a long term contract which came with the latest phone.

You can certainly try...

Posted Oct 22, 2011 0:24 UTC (Sat) by tialaramex (subscriber, #21167) [Link]

Actually I guess that's already more or less what you said. Sorry.

You can certainly try...

Posted Oct 22, 2011 16:37 UTC (Sat) by njs (subscriber, #40338) [Link]

If someone is actually buying a new phone every 12-18 months, then the phone company probably does end up making money off that, since that means they've gone off the 24-month upgrade cycle... but I think that's a pretty small proportion of the userbase, and it's a pretty affluent one that's probably also paying for some top-of-the-line plan.