The realization of value for Smartphones

Spend some time in a retail wireless store and you’ll soon realize that people don’t want to part with their money so much. Whether at Verizon Wireless or AT&T or any other carrier, customers are generally all the same. They have come to expect a ‘deal’ by getting a free phone or an almost-free phone. Well, the problem now is that most phones are more than just phones. 

Today’s smartphones can parallel your desktop to some extent and provide you with an organizer, MP3 player, and cloud computing among other capabilities. So why do we expect for these phones to be given to us for such a discount when they are actually worth so much more?

Some people predict that the days of giving out free phones are coming to an end. That’s because wireless carriers are already heavily subsidizing the smartphones they sell. One reason they are doing this is to gain more customers, of course. More importantly though, they all know that revenue from data plans can be very profitable in the long run so subsidizing doesn’t seem so bad.

As far as the device manufacturers are concerned, they’re in a rat race.  They have to continue to discount their handsets to get them into the hands of mainstream and middle class consumers and for that to happen the price has to be just right. Apple set precedence in 2008 when they lowered the price of the iPhone 3G to $199. Now it seems any smartphone hitting the market at anything over that price is setting itself up for automatic failure. 

On the flip side, the problem with consumers is that they don’t realize the value of a smartphone and the actual cost of the device. Smartphones retail for anywhere from $400 to $1000 without a contract. That’s really expensive right? But not if compared to say if you walk into a Best Buy to get a new laptop in that same price range. Smartphones are starting to replace laptops so why not give them the same value consideration that we would with a computer and realize that we will all have to pay for that mobile convenience?