What if carriers didn't drop prices on aging phones?Evan Selleck - Contributing Editor
When a new phone is about to launch, one of the main things that most of us try to guess is pricing. We do it for a couple of reasons, but it mostly comes down to how it compares to other devices in the market. Other devices on the carrier the new device is launching on, as well as how it stacks up against phones on other carriers. Pricing can make or break a phone’s launch, so it’s very important that manufacturers and carriers figure out where they want to put their new toy when everyone else is comparing it to similar devices.
It wasn’t too long ago that Verizon seemed perfectly content in charging $300 for a new, 4G LTE-equipped device. Actually, the DROID RAZR MAXX by Motorola is still listed, right now, at $300. That’s interesting, solely due to the fact that a brand new 4G LTE-equipped handset has launched on the Big Red network, and some would argue that it’s “better” than that handset manufactured by Motorola.
It’s personal preference, of course, but some would make the argument.
They could even just point out that the Galaxy S III by Samsung, that new handset that just launched for the carrier, is just plain old newer than the DROID RAZR MAXX, and it’s launching for $50 less at its highest price point. Going further, the only thing really standing the DROID RAZR MAXX out on its own against the Galaxy S III is that battery, which is indeed impressive.
But Verizon didn’t feel the need to drop the subsidized price of the DROID RAZR MAXX, which I find interesting. When we look at, say, the HTC Rezound, we notice that Verizon has absolutely no qualms about dropping prices, as that particular device met with a $100 drop in price only two months after it launched.
So what if Verizon didn’t drop subsidized prices on phones? What if they took a different route instead? I’m asking because the newest DROID to join the family, the DROID Incredible 4G LTE by HTC, is only $50 cheaper than the Rezound, and that’s after the former’s price drop. I’m asking, because I’m wondering if customers would rather have the option to get an entirely different device, with almost similar specs, rather than wait for a price drop.
If we’re waiting for a price drop, there’s a chance that something better has come along, or a different version of software, or something else entirely to make that price drop seem not at all worth it. While I don’t think the DROID Incredible 4G LTE is all that necessary, especially when Verizon should be trying to launch HTC One devices, it launched at a good price point, making it perfectly acceptable for anyone looking to get a phone.
It helps that it launched with Android 4.0 Ice Cream Sandwich, and the Rezound is still waiting to get its taste of Android 4.0.
So here’s the scenario I want you to talk about in the comments: a wireless carrier launches a high-end smartphone, featuring some of the best specifications on the market to date. It’s the phone everyone is talking about. Four or five months later, when people might expect a price drop, the wireless carrier teams up with the same manufacturer to launch a device that has specifications that are only slightly less than what originally launched, but it’s still considered high-end. Most importantly, though, the price tag is significantly less. Half the cost, in fact.
Would you buy into that? That initial device, with all of its great specifications, is still posted at that top-tier price point, while the “little brother” device is released with a discounted price tag attached to it, featuring only slightly tweaked specifications to make the new price point make sense at launch.
If carriers did that, then they could easily refresh a high-end device after several months, maybe between six or eight, and not have to worry about people having buyer’s remorse because a similar or even better device launched in a handful of months from the same manufacturer. They’d have more options, too, which is never a bad thing for a carrier.
So what do you think, Dear Reader? What if carriers started adopting a tiered smartphone release strategy? Now that 4G LTE is becoming a standard, Verizon will have to find a new reason to keep phones at $299 at launch, and unless batteries are getting worse, I don’t think that will hold it. Let me know in the comments what you think.