[Superfly_FR]

A Real Concern For Apple

While the article is focused on APPL, I found interesting the following points :

- Less subsidies equals less "impulsive/hype" renew
- People will probably start to choose a "long lasting" device

So the "reasonable" phone choice may become new rule.
IMHO, this is great news for RIM.

[varunsain]

Guess everyone's carried away off late.. Need to focus on the important issues at hand.. A saving of 25% but kill subsidies is a fair share to help improve on their data delivery services ie 4G/LTE

[cgk]

If the plan is to rely on someone else to stumble - that's no plan.

[varunsain]

not really a plan but a strategy that might payback RIM

[cgull]

Sound fine as long as the carriers put an end to long term contracts. Coming out if pocket several hundred dollars for a smart phone is common overseas, just not in the states. This makes for healthy competition when subscribers can move carriers at will. But I bet the U.S. carriers will want it both ways.

Sent from my BlackBerry 9850 using Tapatalk

[Economist101]

The problem here is that while 50%+ of Apple's revenue comes from the iPhone, 65%+ of RIM's revenue comes from the BlackBerry. Sure, their subsidy revenue per device is much lower, but that's a problem they're looking to fix by building demand, not waiting for the subsidies to decline. Also, if subsidies do start to go away, poorer selling handsets are going to be the first victims, not the better selling ones.

[Blackberry_boffin]

It will be a while before the subdisies go away. For Apple at least as most carriers signed "mortgages" with Apple.

[robsteve]

The problem here is that while 50%+ of Apple's revenue comes from the iPhone, 65%+ of RIM's revenue comes from the BlackBerry. Sure, their subsidy revenue per device is much lower, but that's a problem they're looking to fix by building demand, not waiting for the subsidies to decline. Also, if subsidies do start to go away, poorer selling handsets are going to be the first victims, not the better selling ones.

This may hurt Apple since they only have a couple models. For example, doesn't Apple make more money on higher memory models? Would the lack of subsidies shift some of the 32gb,64gb sales into the less profitable 16gb?

In the case of RIM, maybe it would shift people from the 9900 to a 9790, but RIM may have a better margin on the 9790.

[raino]

This discussion would be moot if American and Canadian carriers kill the subsidies but still keep the same rate plan structuring/contract requirements.

Somehow I just don't see them going to the Indian/European model where the market has been opened up after subsidy removals.

[adrenaline_x]

If you are buying the phone outright, there won't be a contract to sign.

It may be even better if you can walk into best buy and buy an unlocked blackberry or android device and then walk into the carrier of your choice to pick a plan. Or maybe even a Blackberry store?

First they have to get products that people would be willing to walk in and buy first

[raino]

The thing though is that carriers (such as AT&T) force a data plan on you regardless of where you get your phone from. The explanations range from "We want our customers to have the best possible experience with their smartphones" to "Data plans let customers fully utilize their device, without the worry of bill shock."

So, if I'm not getting a subsidy on the handset's price and am being forced to get a plan I don't want, am I not better off with the $300 subsidy that comes with a contract?

[BoldPreza]

This discussion would be moot if American and Canadian carriers kill the subsidies but still keep the same rate plan structuring/contract requirements.

Somehow I just don't see them going to the Indian/European model where the market has been opened up after subsidy removals.

Maybe for the big companies but even they are feeling the pinch as of late with the smaller carriers like Wind, Public and Koodo making significant inroads.

These smaller ones offer the subsidy through their TAB plan(though not really a subsidy since you still pay it eventually and you are not locked into contracts with them so you are free to change at any time.

Wind in particular from a consumer perspective looks like a great choice since right now I can get pretty much my existing plan plus voicemail, though reduced to only 100mb for $25/month as compared to my $65. If I wasn't locked in with a penalty for cancellation and didn't love how reliable and expansive my network is I would have switched already.