
Nokia’s price for exclusivity - coob
http://www.asymco.com/2012/10/22/nokias-price-for-exclusivity/
======
Osiris
It always surprised me that Nokia made such a public announcement that they
would be killing an existing product line that was selling fairly well (at a
solid profit from what I understand).

While switching from Symbian to WP7 may have been a good idea, to publicly
announce that you're dumping the platform of your best selling phones seems
like a pretty big blunder.

Yahoo's approach seems better to me. I'm sure that Marissa has a game plan for
products that they'll EOL and directions that'll change but they're keeping it
close the vest to not shake things up publicly too much.

~~~
ChuckMcM
I agree this will be studied like the Osborne Executive gets studied in
business schools. I've seen these sorts of transitions managed in different
ways, they all have their risks. Commodore-64 to Commodore Amiga
(unsuccessful), Apple II to Macintosh (successful), Emulex Storage to
Networking (not successful), IBM Mainframes to software consulting
(successful). It is a tricky tricky thing to do, to take your company's most
profitable product and build a replacement inside its market internally.

~~~
josteink
_Commodore-64 to Commodore Amiga (unsuccessful)_

Except every kid I knew when I grew up swapped their Commodore 64 (which they
had) for an Amiga 500. The Amiga was widely successful and ahead of everything
else at the time, at least within the consumer price-point.

What killed Commodore was that they got complacent, lazy and slept on their
laurels.

When the PC finally overtook the Amiga (much like Nokia, RIM being overtaken
now, etc) it took too much time until they realized what was happening, and
when they did, it was too late. They had no products to offer which could
match the competition, and slowly, but surely they went into bankruptcy.

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i386
Page seems to be down. Anyone have a mirror?

~~~
algolicious
The best mirror I could find (nyud.net and Google let me down):
[http://substancedigital.com/2012/10/21/nokias-price-for-
excl...](http://substancedigital.com/2012/10/21/nokias-price-for-exclusivity/)

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aik
I wonder if this is also why providers can price the Lumia 920 so aggressively
at $149 with a 2 year contract (iPhone and the Galaxy III are both $199 at the
least). I'm curious what price point they can buy the phones at...

~~~
cletus
See now this is an example of how US cell phone consumers have been
successfully brainwashed. A $50 difference on the subsidized cost of a handset
is not "aggressive" discounting; it's inconsequential.

Chances are you'll be paying $60-100/month for 24 months when you take out any
smartphone service (or less if you go with T-Mobile or Sprint). Assuming $80
that's:

    
    
        $199 + 24 * $80 = $2119
    

vs

    
    
        $149 + 24 * $80 = $2069
    

which is less than a 3% discount. Now the service obviously costs something
and you may not have it for 24 months (which probably means you're paying an
ETF anyway) but that should definitely be how the consumer looks at it: would
you rather pay $2119 for an iPhone and service or $2069 for a Lumia and
service?

Even worse, I see people who will pay $2119 for the iPhone 5 and $2019 for the
iPhone 4. It makes no sense.

Here's another way of looking at it: that $199 iPhone 5 costs ~$650
unsubsidized. Your ETF is (IIRC) $350 (-$10/month on the contract). If you
terminate immediately you've paid $200 + $350 + probably $80 so basically full
price anyway. If you do so after a year you pay $200 + $230 + whatever you've
spent on service. $430 from $650 means they've discounted the phone $220 for
you but you've also spent $960 on service.

To compare: when I got my iPhone 4 in Australia the 64G model was A$1000 at
the time (the exchange rate was at the time a lot worse than it is now). Also,
that includes tax (10% GST). Instead I bought the phone on a Telstra Business
24 month contract which was $50/month and $299 for the phone with a $100 store
voucher (from JB Hifi), so $199 + $50 * 24 = $1399 - $1000 retail cost means I
really only paid $400 for 2 years of service or alternatively the phone was
discounted $800. Either way _that_ is "aggressive" discounting.

Seriously, cell phones are an utter ripoff in the US. It still astounds me how
expensive it is.

Oh and in the US you pay to receive calls. Not true in Australia and most of
Europe that I'm aware of (certainly not the UK, Germany or Switzerland).

~~~
beagle3
You are absolutely correct about everything. Two additional points:

1\. While the brainwashing is there, and is very effective, the major carriers
(AT&T, Verizon) will make you pay the same monthly charge whether you bought a
"subsidized" phone from them or not. So instead of subsidized phone vs.
unsubsidized phone (the way you have it in most of the world), what you have
in the US is sucker-with-a-lower-price-tag ($200), vs. sucker-with-a-higher-
price-tag (e.g. $650 if bought from Apple) - your service cost will be the
same (with the exception that if you brought your own phone, you won't pay an
ETF if you leave early).

2\. Yes, it is exclusively in the US that you pay for incoming - and that's
for historical reasons. Unlike essentially everywhere else, there is no
special area code for mobile, so you can't tell if you're calling a mobile
phone, so -- back in the days when calls to mobile cost more everywhere --
there was no other way to handle this. But the US public has gotten used to
it, so no company is thinking of changing that - people here think its normal
to pay for a received text message (SMS) as well...

Mobile phone service in the US is a ripoff, but it will not change because the
public is not aware that is the case, and congress is bought and paid for.

~~~
andybak
I could never work out why people in the US were so resistant to buying their
phones from a 3rd party.

Are you saying that carriers don't offer any 'SIM-only' packages? i.e. You
can't ask for a contract without a free phone?

If so - is there a workaround? If I went for a package with the cheapest
possible dumb-phone, how much would I save?

For comparison I'm on a $28/month package with Virgin that I can cancel at any
time (1 months notice) and has unlimited data and SMS. No phone included. This
is a particularly good deal but even before this there were similar deals but
with a data cap.

~~~
beagle3
> Are you saying that carriers don't offer any 'SIM-only' packages? i.e. You
> can't ask for a contract without a free phone?

You can; but at AT&T and Verizon, it's not cheaper than if you do get a phone,
so everyone gets a phone. And for quite a few people, T-Mobile and Sprint are
unacceptable (coverage, technology).

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ableal
The Asymco.com site seems to have had a hiccup. Text, but no charts, at the
Google cache:
[http://webcache.googleusercontent.com/search?q=cache:m1lNim-...](http://webcache.googleusercontent.com/search?q=cache:m1lNim-
lyJsJ:www.asymco.com/2012/10/22/nokias-price-for-
exclusivity/+&cd=1&hl=en&ct=clnk&client=firefox-a)

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chris_wot
Er... this is now giving a 404?

