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?
IMHO, this is a business model that is well past its sell by date.
Being forced to use a work supplied HTC Android that had all the ORange crud as well as the HTC crud was the last straw for me.
Unlocked phones are it for me from now on. I have a dual sim device now. Great because I travel a lot I can buy a local sim card and not have to pay roaming charges, not that I pay them when I’m in the US. My UK network is currently 3. 4G at no extra charge and truly unlimited data has a roaming agreement with T-Mobile in the US. all the calls I make come out of my UK plan minutes. That plan is a SIM only deal, with a one month notice.
The other thing is that the US Carrier really need to get themeselves out of the 19th Century with all those extra charges and frankly stupid restrictions. They should get on with proving a decent service. If they do that then the customers will come.
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.