Your Price “Your Price” is the optimal price after factoring in contractual (i.e. equipment discount), business and consumer pricing based on a one or two-year service agreement. This price is independent of eligibility requirements.
With Discount “With Discount” is the discounted amount given should you meet eligibility requirements.
Promotional Discount ($ displayed) This is the discounted price available for the device should you meet eligibility requirements.
No-Commitment Price The no-commitment price is the price you will pay for a phone/device without a service commitment. No contract extensions are required for existing customers, and buying a device at the no-commitment price does not affect your future upgrade eligibility. When you purchase a device at the no-commitment price, you are not eligible for any phone/device discounts or rebates; however, you will continue to receive any service discount for which you qualify.
Riddle me this: Why can’t phones just have a simple price?
Eric
on 12 May 10Riddle me this, why can’t the same service be priced the same on virtually identical devices?
Henrik Paul
on 12 May 10E.g. in Finland it’s more common to walk into an electronics store and buy your phone without any kind of contract or subscription, and get the subscription separately from the providers. While there are phone+service contracts available, it’s widely acknowledged and known by Finns that it’s more expensive than getting them separately.
I love this model. I can pick up any model with the best price I can find (iPhone being the only exception, it’s tied with a contract), and find myself a suitable service bundle on my own terms. I’m in control. And I love being in control.
Richard Polhill
on 12 May 10In the UK it is pretty simple.
Each operator offers phone/contract deals, phone/prepay deals and contract or sim-only deals.
Therefore you decide whether you want a new phone or just a new SIM, and whether you want a contract of pre-pay.
Then you choose the contract you want and select from a list of “free” phones or pay a one-off charge for a better phone.
There’s still too much choice when you consider there are 4 networks and 20 or so providers, but at least you don;t have to calculate the various options.
Oh you can, if you so desire, simply buy a phone outright, of course.
Jay Godse
on 12 May 10I suspect that AT&T probably makes poor margins on mobile phones and fantastic margins on service. Therefore, they need to get people to buy their phone service and they use the low-margin phone as a way to lock you into that service.
Olga
on 12 May 10Riddle me this, why there’re no cell phones just to make calls and to send/get SMS? why are forced to swallow tons of content from the web? as for buying model, it’s not only in Finland – most of Europe is like that, you just buy a phone and you choose a service provider.
Chad
on 12 May 10The biggest riddle really is, why does the service plan cost the same, regardless of any subsidy used in the initial phone purchase?
With a 2-year, voice only, contract running a minimum of $960, the service cost well exceeds the equipment cost. Even so, I would pay the same $960 regardless if I let ATT/images/verizon/Sprint subsidize my phone or if I bought it outright.
Carriers want to make the customer feel like they are getting a great discounted price upfront so they don’t think about how much they pay over the actual life of the contract.
Ryan Heneise
on 12 May 10And how is it that I end up paying $180/month for a plan advertised at $70/month?
I sure wish I had gone to college wherever they went to college, because they do math differently than what I learnt.
Steven
on 12 May 10Here in Canada, one of the mobile upstarts, Wind Mobile has been running hilarious ads mocking how dodgy pricing plans are (see link below). Our big three providers are notoriously consumer unfriendly when it comes to mobile prices.
http://www.youtube.com/user/WindMobileCAN#p/a/u/1/xrTAUkYxPM0
Sean Eby
on 12 May 10The question should be turned around a bit. It should be, “Why would AT&T or any other phone company have this kind of pricing?”
Answer: Regulations and local taxes and other state restrictions make it very challenging to offer uniform promotions that offer exact prices and discounts. Blame the government for sticking their hands deep into everyone’s pockets on this. It’s also why you pay practically another 15% in various taxes on your phone bill? “Unlimited talking for, say, $69.99 a month,” you ask? No, try at least $80 after you factor in the taxes.
And maybe, secondarily, another question: “Are there phone companies out there that do offer just straight-forward, flat-fee, no additional taxes or fees pricing?”
Answer: I believe there are. Cricket may be one of them. Boost may be another. Turns out both of those are actually just piggy-backing off the majors.
James
on 12 May 10Don’t forget the “Upgrade” fee they charge you when you get a new phone. I asked them if it was a fee for buying a new phone. They beat around the bush saying “well, there’s other things involved…” but in essence they told me that’s what it was.
Anonymous Coward
on 12 May 10@all
This isn’t specific to AT&T. All carriers do this, unfortunately.
Pawel
on 12 May 10why don’t your products just have a simple price?
Sammy
on 12 May 10What Pawel said. The only difference I can see between 37signal’s pricing model and AT&T’s on this is that they’re selling a physical product, and they’ll try to steer customers towards one or another alternative via promotions.
I think what you really want is for that text to be in plain English:
“Buying a phone? You get a discount if you get a plan along with it. Sometimes we’ll also run a promotion on individual phones. We’ve split out the various prices for these phones so you can see what your options are.”
Regarding the other “hidden” fees other commenters have complained about… well, I have nothing to add there. They suck.
JD
on 12 May 10Pawel and Sammy, our products do have a simple price. We don’t have contracts. We don’t have hidden fees.
Beerzie
on 12 May 10When do you roll the 16-sided die?
Alex M
on 12 May 10Why can’t 37signals have a simple price?
Are you saying this is confusing or deceptive? Because if you’re saying it is confusing, I personally find it very simple to understand. What is confusing about it? That there are different prices for different services and product bundles?
If you’re saying this is deceptive because the different plans don’t reflect the difference in infrastructure costs, I don’t see how that is different from 37signals’ pricing. The infrastructure prices of the different plans you offer aren’t directly tied to the different prices.
Tim
on 12 May 10Because it creates market friction and makes it difficult to impossible to compare products as apples to apples. They’re a commodity service that has found ways to ensure that they can differentiate brand without actually having any real differences.
Denny Daugherty
on 13 May 10Unfortunately consumers in the US are so accustomed to subsidies that few realize the actual cost of the devices, and even fewer would pay full price. Look at the trouble that Google had with the Nexus One, for example. I actually prefer a simple price, to buy the phone and manage my service separately. I just upgraded to a Nexus One, and the experience was seamless. I bought the phone, swapped my sim card, and that was it.
Before upgrading to the Nexus One, I had used my previous phone for 3 years. Sure, I was eligible for a subsidy at any time, but I chose to save my pennies and wait. Unfortunately for me, during those three years I was paying to subsidize everyone else’s phones. Why is it so important that every two years we throw away a device that may work fine and upgrade anyway? Sure, technology moves fast, but I got along fine for an extra year without upgrading. I saved money and reduced waste which I think are generally good things, but the subsidies feed our consumer culture.
The other issue is that unlike the rest of the world, the US has a confusing mix of networks. So, you can’t just buy a phone and use it any network you please (with the exception of unlocked GSM phones on T-Mobile/AT&T). So just by the nature of the network the phone is tied to the provider which is unfortunate because it limits options and creates extra complexity for consumers and those building and marketing the devices.
Why can’t we have a simple price? I guess it comes down to the different market forces in play. Change is possible, but it would take a lot of effort and very well executed.
Jerry
on 13 May 10Tell me about it. I used to work in an AT&T retail store and it was very frustrating to explain the phone pricing to customers. In addition, the market I worked in (NYC market) thought it was a great idea to additionally post multiple prices including various accessory prices combined with the phones. This would create a price list with 5 or more prices. Me and the other sales reps would argue about the complexity but management would state that the profit margins were better. The price list is clearly designed for the company’s benefit and not the customer.
Dylan
on 13 May 10Answer: because generally speaking, Telephone companies are evil, and happily use confusion as a marketing/manipulation tool.
What other industry exists where you’re forced to guess 12 months, or 24 months in advance what your usage will be? If you over-estimate they’ll sting you with excess data/voice charges, and if you under-estimate you just overpay each month.
Imagine if we had to pay for fuel that way!? Guess today how much fuel you’ll use for the month. Think hard, because if you get it wrong…you’ll pay extra!
It’s ridiculous.
Pawel
on 13 May 10JD,
of course you don’t have hidden fees. As far as contracts go, yours are monthly.
But what I meant with my post is that you, too, differentiate prices. You have 5 plans for Basecamp and 6 for Highrise. With some you get a Campfire account for free. These prices do not reflect costs one-to-one, rather you charge whatever optimizes your profit (which is fine).
It is difficult to tell what exactly you were trying to say with your post, since I don’t know which context you found that AT&T quote in. Where are their hidden fees?
I don’t live in the US at the moment, but when I did live there I simply bought a phone from AT&T at the regular price and had a prepaid contract, which I could terminate without additional cost every month. The other option would have been to buy a “subsidized” phone, which simply would have meant that I would pay off the phone over a year or two (hence the long term contract).
I regularly read your blog and really like it. But sometimes you seem to be tempted to take cheap shots to live up to your image. Needless to say, AT&T’s writing could be better.
Cheers, Pawel
John A Davis
on 14 May 10A lot of what we pay for phones and service goes towards advertising and trying to lure new customers (and profit for shareholders and CEOs). And there really aren’t that many choices and they play a game of not outdoing the other phone companies by too much, least they kill the cash cow for all of them. It’s a business process that craps on the “age of computers where everything will be done easily and cheaper through technology”.
This discussion is closed.