Linked by Thom Holwerda on Thu 21st Aug 2014 18:15 UTC
PDAs, Cellphones, Wireless

China should end smartphone subsidies to overseas vendors and give more support to local brands, industry insiders said on Tuesday, as telecom carriers pledged to cut operating expenses and Apple Inc gets ready to debut its next-generation iPhone.

Xiang Ligang, a telecom researcher in Beijing, said cutting carriers' subsidies to foreign-made handsets will not only reduce carriers' operating expense but also leave local players with more market demand.

"It will be a one-stone-two-birds move for the Chinese smartphone industry," he said.

I'm all for doing the same here in Europe and overseas in the US - but, of course, only if it applies to all smartphones, regardless of origin. Let people see what they're really paying for their Galaxy S5 and iPhone 5s. Can you imagine if smartphone vendors and carriers can no longer mislead consumers?

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Comment by Nelson
by Nelson on Thu 21st Aug 2014 19:01 UTC
Nelson
Member since:
2005-11-29

This is why China is such a hard market to crack if you're not a domestic company, there's an extreme amount of protectionism going on there.

Kudos to Apple for trying, but ultimately I don't think its a business environment conducive to foreign companies.

I'm all for a level playing field though, carrier subsidies distort the market heavily in the US, making cell phone prices irrelevant assuming you're even remotely credit worthy.

Reply Score: 4

RE: Comment by Nelson
by Bill Shooter of Bul on Thu 21st Aug 2014 20:48 in reply to "Comment by Nelson"
Bill Shooter of Bul Member since:
2006-07-14

I don't really understand why people say subsidies are still a dominant effect in the US market.

Tmobile & At&t have completely moved away from subsidies. Price matters. No more hidden device fees.

However, the challenge is in marketing and selling unlocked devices that are not sold by the carrier. People still largely buy from the store, rather than shopping online for an unlocked phone. Its tough to get a feel for a phone via website.

So, I guess people still are thinking its a subsidy effect, but its really a carrier selection issue? Maybe?

Reply Parent Score: 3

RE[2]: Comment by Nelson
by Nelson on Thu 21st Aug 2014 21:40 in reply to "RE: Comment by Nelson"
Nelson Member since:
2005-11-29

Subsidies still exist, they're just no longer tied to the service contract. You effectively pay a deposit and a monthly installment. Which they wisely keep enticing you to upgrade your device, having many concurrent installment plans running.

It achieves the same end result that straight up carrier subsidies do. The good thing that TMobile did is make it so that the two (service contract and phone installment plan) aren't intermixed. Which is a win for transparency I suppose.

Reply Parent Score: 4

RE[2]: Comment by Nelson
by torp on Thu 21st Aug 2014 21:50 in reply to "RE: Comment by Nelson"
torp Member since:
2010-08-10

I don't really understand why people say subsidies are still a dominant effect in the US market.


People will stop saying that subsidies are still a dominant effect in the US market when iPhone reviews will talk about the price being $599, not $199...

Edited 2014-08-21 21:50 UTC

Reply Parent Score: 2

RE: Comment by Nelson
by marce on Fri 22nd Aug 2014 05:40 in reply to "Comment by Nelson"
marce Member since:
2014-05-03

What about Apple vs. Samsung a few month ago?

(Greetings from Euroland!)

Reply Parent Score: 1