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Verizon wireless to charge customers $30 for upgrading to a newphone by ferujkll sdff
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Verizon wireless to charge customers $30 for upgrading to a newphone |
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Business,Business News,Business Opportunities
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Verizon Wireless has decided to tack on a $30 surcharge when usersopt to upgrade their mobile device. AT&T has indicated it willlikely follow suit. Pinched by the heavy subsidies it pays Apple to attract iPhonebuyers, Verizon has announced it will charge upgrading customers an additional $30fee when they qualify for a subsidized device and choose to switchphones. In a report by Reuters , the carrier said it would be charging the fee to "providecustomers with the level of service and support they have come toexpect." Verizon and other carriers have agreed to pay Apple industryleading subsidies of around $450 to attract new subscribers whowant an iPhone, in order to lock them into a contract of two yearsor more.
However, when existing customers upgrade their phone, carriersdon't earn as much additional new income; the customers merelycontinue to pay for the phone and data service they use. Verizon's move may be intended to counter the shift of its existingsmartphone customers, many of whom bought Android devices in 2010before the company began selling iPhones. Customers who will befinishing their two year contract this year will qualify for asteeply subsidized new iPhone, but likely won't be paying anythingadditional for service because they were already signed up forexpensive data contracts. Verizon has been charging its customers more for Android phones, due to the limited clout Androidmanufacturers have in negotiating phone subsidies with the carrier.
Typical Android subsidies at Verizon range from $60 to $200 lessthan the $450 subsidy iPhone users get, making comparable devicesmore expensive up front and pushing low end Android phones into thethe same price range as Apple's iPhone 4. Verizon is eating thedifference, causing Android users to effectively subsidize theprice of iPhones. After an initial period of attracting new iPhone users andconverting many feature phone customers to more expensive datacontracts, Verizon is now finding itself with less low hangingfruit to take advantage of, as the market for smartphones begins tosatiate demand, even as new alternative and regional US carriersgain access to the cash cow iPhone. Chicken Little says the subsidy is falling Last week, BITG Research analyst Walter Piecyk decided Apple's high iPhone subsidies wouldn't last, and issued adowngrade and a prediction of revenues $1 billion below consensus.
However, a year ago analysts were saying the same thing. James Ratcliffe, an analyst at Barclays, estimated last Januarythat Verizon would sell just 9 million iPhones in 2011, spending$350 to subsidize each sale, for a total of $3.2 billion. Ratcliffe also expected AT&T to sell just six million iPhones in2011, down from around 15 million in the previous year. He alsofigured that AT&T's subsidy will drop from $400 to $350 per devicedue to the end of its exclusive deal with Apple.
In reality, AT&T sold 9.4 million iPhones just in the fourthcalendar quarter of 2011, and Verizon sold 4.3 million in the samequarter. Neither carrier has cut its iPhone subsidies, even asSprint and a variety of new carriers have joined Apple in sellingiPhones in the US. I am a professional writer from Bag & Luggage Agents, which contains a great deal of information about antiseptic hand wash , planet drugs direct, welcome to visit!
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