There once was a time when cell phone companies ruled the mobile industry with an iron fist and brutalized their customers by beating them into submission with an endless array of phones, special rates, minutes, and services so complex they would have befuddled The Lord himself.
Along came Apple and the iPhone with a simple pricing mechanism which quickly turned the smartphone industry upside down and relegated the cell phone companies into a position of selling bandwidth and not much more.
Take a look at the AT&T, Verizon, and Sprint pricing on the Apple Store. Doesn’t it look as though Apple had a hand in cutting away the rates and minutes baloney to get down to want everyone really wants. Unlimited minutes, unlimited messages, and wireless bandwidth.
My weekend project was to entertain my parents at the local Apple Store and get them into an affordable plan with a new iPhone.
AT&T still has Individual plans, and Family plans, both of which feature minutes and a heft price tag for text and bandwidth, but the Mobile Share plan is quickly becoming the most popular. It’s simple, straightforward, and features a range of prices based on bandwidth usage.
Verizon’s smartphone pricing is even simpler (though seemingly about the same as AT&T for similar bandwidth and sharing options). Everything is shareable. Minutes and text are unlimited (although Verizon has a different definition for unlimited). Pay extra for the bandwidth you need.
Anemic little Sprint has even more simple pricing, but two of the three tiers feature minutes. Text and data are unlimited (except for domestic roaming, which is remarkably small, considering that Sprint users may roam more than others).
Remember how complex cell phone rates and plans were just a few years ago? AT&T’s Unlimited plan for the iPhone back in 2007 was the beginning of the end of complex rates for smartphone users. Simplicity is key.
Apple had a hand in busting up the ring tone industry for smartphones, too. iMessage also took another bite out of cell phone company revenue and profits.
There may not be much unlimited bandwidth left for smartphone users to choose, but quickly everything else– minutes, text, MMS– fall into unlimited territory with an all you can eat pricing mechanism that is simple to understand, easy to budget.
Now, that said, there’s still a strong motivation for smartphone owners to upgrade every two years. Why? Cell phone companies are still in business to make money. They subsidize the price of a new iPhone (and other smartphones) with a contract. Instead of paying $650 for a new iPhone, and a monthly usage fee, their customers pay $199 up front, and the difference is amortized over the life of the contract.
If you don’t upgrade to a new iPhone in two years when the contract ends, you’re still paying that subsidized monthly rate to the cell phone company. They might be morphing into purveyors of dumb wireless pipes, but they’re not stupid. Giving you a big discount for a new phone every two years or so still makes them very profitable companies.
At least we don’t have to wade through page after page of complicated rates and plans, and then get the nickel and dime death treatment for ringtones, text messages, and crazy hours to call.