The other day I was chatting with the Globe and Mail’s telecom reporter, Iain Marlow. We talked quite a bit about how “game changing” the current crop of new devices have been and could continue to be going forward.
Handsets like the Nexus One, iPhone and new Blackberry products are “game changing” because of the functionality, the brands behind them, and the model of customers buying the devices themselves, rather signing up for a contract and paying for the device through the service (aka a handset subsidy).
The reality is that the model of purchasing a handset has been changing all over the world for years now. Mobile devices are becoming more like multi-function consumer electronic devices, and the trend I'm seeing is that customers overwhelmingly prefer to chose their handsets independent of the service provider (and largely in mobile device stores independent of operators).
That’s why you see things like handset exclusivity, locked handsets, contracts… all disappearing in international markets. When the first model of the iPhone initially launched, 4 million people lined up to pay full price PLUS RETAIL MARKUP for the device. That is one example of massive customer demand for choice and freedom. Very cool!
And with the number of manufacturers now, there is a device and a price that suits everyone.
But progress is a tricky business, especially when you're talking about locked phones. I would love to offer WIND phones unlocked at the time of purchase, but the only way for unlocking to work is at an industry level. If we were to be the only ones to introduce unlocked handsets, competitor’s dealers and other distributors could buy out all of our inventory (as our retail pricing is often lower than what they pay) and we’d have no inventory for our customers. This can also happen with US or foreign dealers coming to buy out stock. Hence, our phones are locked for the first 3 months, but we have no issue providing the unlock codes to a customer after that.
The good news is that there is progress on the consumer awareness front: customers today know that they’re not getting any device “for free.” They’re paying for it in higher service costs and contracts. As Canadians vote with their wallets for handset choice, unlocked handsets, and freedom from contracts, I don’t believe that they’ll continue to accept paying high service fees or being locked into contracts.
I can see a future where exclusivity and locked handsets are a thing of the past, but it has to happen at the industry level. That’s game changing… and the sooner the better!
Exactly... I agree with you. Yes. Locking for 3 months is welcome!
... but I am still waiting to hear about Nexus One arrival. Any progress Chris?
You guys have the right idea here with this policy to provide the unlock codes for your phones. I can't say if the industry will follow suit any time soon though, RoBeLus seems to really love the concept of contracts.
You make a fair point with the launch of the iPhone but remember when after it was subsidized the number of iPhone owners skyrocketed and that's in the U.S. alone not including any other countries.
People do want to own their own handsets but rather than force them to pay the full amount give them an option for a subsidy, contracts only need to be for a year max. making poeple pay $450 for a reasonable phone is not a good solution.
Clearly when given the option people will choose subsidy over handset ownership. I would too.
@Tom Foolery You have to realise that when telecom companies subsidise the phone you end up paying way more at the end. Look at Telus for instance, if you buy their iPhone for $199 they will force you to sign up for a $50 minimum plan and 3 years contract. Multiply the extra over 3 years and see how much extra you have paid. Even to buy their phones outright come with a huge markup which can clearly be seen with the price of Wind's BB 9700. With Winds business model not only you save money, but get to keep your freedom too.
Very well said Chris. Yes the first iPhone was sold at a high price and it was selling like hot cakes. I am hoping WIND will bring more cool devices in the future.
Locking the phones for three months seems fair to me and the reasons you provided seems justified.
Now Chris, any updates for us re the Nexus One chat with Goolge?
Any news re the AWS iPhone?
If you're going to talk about game-changers, you must at least remember to mention the Nokia N900 :)
I bought the Nexus One and am waiting for its arrival, but people tell me many things won't work because Wind is blocking all the ports except HTTP and HTTPS. Is that true? What is Wind going to do to people who want to use their own smartphone (that may use non-standard TCP/IP ports) on Wind?
@Agyaat Wind is great because you get far more value for what you pay, but the actual monthly costs are still pretty comparable to the other carriers if you want a smartphone. You still need a $35 data plan on $15 minimum voice plan, which is the $50 you would spend minimum at Telus for an iPhone plan.
I kind of wish Wind would offer contracts. If I know I want to be with you guys for the long term, why not save me some money on the smartphone?
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