Archived from groups: alt.cellular.verizon (More info?)

Hi -
Does anyone know how Verizon decides prices for phones? How come you
often see two phones, similar features, but from different cell phone
vendors - and they're priced so differently?

Thanks -
Susan

Archived from groups: alt.cellular.verizon (More info?)

"mobile project" <inquiryresponse@gmail.com> wrote in message
news:1114867087.481150.127410@l41g2000cwc.googlegroups.com...
> Hi -
> Does anyone know how Verizon decides prices for phones? How come you
> often see two phones, similar features, but from different cell phone
> vendors - and they're priced so differently?
>
> Thanks -
> Susan
>

Sure Susie, they do the same thing every comnpany does-- charge all the
market will bear trying to stay 5-10% below the ouch point so sales won't
drop off...

Archived from groups: alt.cellular.verizon (More info?)

Patrick Cleburne wrote:
> "mobile project" <inquiryresponse@gmail.com> wrote in
> message
> news:1114867087.481150.127410@l41g2000cwc.googlegroups.com...
>> Hi -
>> Does anyone know how Verizon decides prices for phones?
>> How come you often see two phones, similar features, but
>> from different cell phone vendors - and they're priced
>> so differently?
>>
>> Thanks -
>> Susan
>>
>
> Sure Susie, they do the same thing every comnpany does--
> charge all the market will bear trying to stay 5-10%
> below the ouch point so sales won't drop off...

Ummm, did you read the question?

The question was "why are two phones with similar
features priced so *differently*?".

-Quick

Archived from groups: alt.cellular.verizon (More info?)

"Quick" <quick7135-news@NOSPAMyahoo.com> wrote in message
news:1114880222.484060@sj-nntpcache-5...
> Patrick Cleburne wrote:
>> "mobile project" <inquiryresponse@gmail.com> wrote in
>> message
>> news:1114867087.481150.127410@l41g2000cwc.googlegroups.com...
>>> Hi -
>>> Does anyone know how Verizon decides prices for phones?
>>> How come you often see two phones, similar features, but
>>> from different cell phone vendors - and they're priced
>>> so differently?
>>>
>>> Thanks -
>>> Susan
>>>
>>
>> Sure Susie, they do the same thing every comnpany does--
>> charge all the market will bear trying to stay 5-10%
>> below the ouch point so sales won't drop off...
>
> Ummm, did you read the question?
>
> The question was "why are two phones with similar
> features priced so *differently*?".
>
> -Quick

Ummmm, Quickie, did you understand what I said? It's because they can get
it...

Cleburne

Archived from groups: alt.cellular.verizon (More info?)

Patrick Cleburne wrote:
> "Quick" <quick7135-news@NOSPAMyahoo.com> wrote in message
> news:1114880222.484060@sj-nntpcache-5...
>> Patrick Cleburne wrote:
>>> "mobile project" <inquiryresponse@gmail.com> wrote in
>>> message
>>> news:1114867087.481150.127410@l41g2000cwc.googlegroups.com...
>>>> Hi -
>>>> Does anyone know how Verizon decides prices for phones?
>>>> How come you often see two phones, similar features,
>>>> but from different cell phone vendors - and they're
>>>> priced so differently?
>>>>
>>>> Thanks -
>>>> Susan
>>>>
>>>
>>> Sure Susie, they do the same thing every comnpany does--
>>> charge all the market will bear trying to stay 5-10%
>>> below the ouch point so sales won't drop off...
>>
>> Ummm, did you read the question?
>>
>> The question was "why are two phones with similar
>> features priced so *differently*?".
>>
>> -Quick
>
> Ummmm, Quickie, did you understand what I said? It's
> because they can get it...

The question was WHY?
example:
Phone A: Clamshell with camera 50$
Phone B: Clamshell with camera 100$
same features, look and feel.

The question was why?

Here is a clue before you respond:
"because they can" is not an answer.

-Quick

Archived from groups: alt.cellular.verizon (More info?)

Patrick Cleburne wrote:
>
> <snip>
>
> Ummmm, Quickie, did you understand what I said? It's because they can get
> it...

And you know that *for a fact*?

Isn't it possible that different manufacturers charge
Verizon different prices?

Notan

Archived from groups: alt.cellular.verizon (More info?)

Notan wrote:

> Patrick Cleburne wrote:
> >
> > <snip>
> >
> > Ummmm, Quickie, did you understand what I said? It's because they can get
> > it...
>
> And you know that *for a fact*?
>
> Isn't it possible that different manufacturers charge
> Verizon different prices?
>
> Notan

Pricing is NOT a simple art. Lots of possible reasons.

LB

Archived from groups: alt.cellular.verizon (More info?)

"Quick" <quick7135-news@NOSPAMyahoo.com> wrote in message
news:1114923664.355392@sj-nntpcache-3...
> Patrick Cleburne wrote:
>> "Quick" <quick7135-news@NOSPAMyahoo.com> wrote in message
>> news:1114880222.484060@sj-nntpcache-5...
>>> Patrick Cleburne wrote:
>>>> "mobile project" <inquiryresponse@gmail.com> wrote in
>>>> message
>>>> news:1114867087.481150.127410@l41g2000cwc.googlegroups.com...
>>>>> Hi -
>>>>> Does anyone know how Verizon decides prices for phones?
>>>>> How come you often see two phones, similar features,
>>>>> but from different cell phone vendors - and they're
>>>>> priced so differently?
>>>>>
>>>>> Thanks -
>>>>> Susan
>>>>>
>>>>
>>>> Sure Susie, they do the same thing every comnpany does--
>>>> charge all the market will bear trying to stay 5-10%
>>>> below the ouch point so sales won't drop off...
>>>
>>> Ummm, did you read the question?
>>>
>>> The question was "why are two phones with similar
>>> features priced so *differently*?".
>>>
>>> -Quick
>>
>> Ummmm, Quickie, did you understand what I said? It's
>> because they can get it...
>
> The question was WHY?
> example:
> Phone A: Clamshell with camera 50$
> Phone B: Clamshell with camera 100$
> same features, look and feel.
>
> The question was why?
>
> Here is a clue before you respond:
> "because they can" is not an answer.
>
> -Quick


Oh Quickie, in fact it is the answer. Just because you don't like it doesn't
make it not so.

Remember when you had your lemonade stand? You could charge whatever you
liked. You could vary your prices by time of day or by customer or by
weather. You could charge more late on a hot Saturday afternoon when people
were sweaty from cutting the grass so demand was higher. Or you could give a
unit price reduction for volume purchases-- say when a soccer mom with a van
full of kids pulled up. You could charge the neighborhood grinch more
because you didn't like him-- or give a special discount to you friend Billy
or the little redheaded girl you had a crush on.

You sound like a card-carrying member of the Flat Earth Society-- or
possibly just someone whose financial and economic education ceased back in
the first or second grade;-)

Cleburne

Archived from groups: alt.cellular.verizon (More info?)

How: only VZW knows, but imagine this:
- VZW makes a significant amount of money on "data". It could be
double/triple of their normal base revenue (for people without packages et
all). So, I'd imagine that phone prices are a balance of
1) the true cost of the phone
2) adjusted for consideration of a $175 early termination (same termination
if you provided the phone)
3) adjusted for the revenue generation potential (picture, data, video, ptt)
4) and then, what the market will bear.

As like any other business: if new connections are down, the prices of
phones will go down. The phones are not a big revenue source for any
carrier. It is the monthy service. If you have 100 people using an
existing tower, and they add another 50 people, there is no inceased cost to
support them, so this is extra margin $$.
--
dr. wireMORE (don't accept "less", demand "more" )
Wireless Consultant/Engineer & FORMER Midwest VZW Master Agent
Data, wi-fi, national access, smartphones, and home
computer healthchecks, stop worrying... just ask for the dr.

If you need specific help, leave your email address & we'll try to contact
you. Worried about leaving your email address..... yup, me too.
cingular<snip>@<snip>wiremore<snip>.biz<snip> remove the obvious please
"Quick" <quick7135-news@NOSPAMyahoo.com> wrote in message
news:1114923664.355392@sj-nntpcache-3...
> Patrick Cleburne wrote:
>> "Quick" <quick7135-news@NOSPAMyahoo.com> wrote in message
>> news:1114880222.484060@sj-nntpcache-5...
>>> Patrick Cleburne wrote:
>>>> "mobile project" <inquiryresponse@gmail.com> wrote in
>>>> message
>>>> news:1114867087.481150.127410@l41g2000cwc.googlegroups.com...
>>>>> Hi -
>>>>> Does anyone know how Verizon decides prices for phones?
>>>>> How come you often see two phones, similar features,
>>>>> but from different cell phone vendors - and they're
>>>>> priced so differently?
>>>>>
>>>>> Thanks -
>>>>> Susan
>>>>>
>>>>
>>>> Sure Susie, they do the same thing every comnpany does--
>>>> charge all the market will bear trying to stay 5-10%
>>>> below the ouch point so sales won't drop off...
>>>
>>> Ummm, did you read the question?
>>>
>>> The question was "why are two phones with similar
>>> features priced so *differently*?".
>>>
>>> -Quick
>>
>> Ummmm, Quickie, did you understand what I said? It's
>> because they can get it...
>
> The question was WHY?
> example:
> Phone A: Clamshell with camera 50$
> Phone B: Clamshell with camera 100$
> same features, look and feel.
>
> The question was why?
>
> Here is a clue before you respond:
> "because they can" is not an answer.
>
> -Quick
>
>

Archived from groups: alt.cellular.verizon (More info?)

Patrick Cleburne wrote:
> "Quick" <quick7135-news@NOSPAMyahoo.com> wrote in message
> news:1114923664.355392@sj-nntpcache-3...
>> Patrick Cleburne wrote:
>>> "Quick" <quick7135-news@NOSPAMyahoo.com> wrote in
>>> message news:1114880222.484060@sj-nntpcache-5...
>>>> Patrick Cleburne wrote:
>>>>> "mobile project" <inquiryresponse@gmail.com> wrote in
>>>>> message
>>>>> news:1114867087.481150.127410@l41g2000cwc.googlegroups.com...
>>>>>> Hi -
>>>>>> Does anyone know how Verizon decides prices for
>>>>>> phones? How come you often see two phones, similar
>>>>>> features, but from different cell phone vendors -
>>>>>> and they're priced so differently?
>>>>>>
>>>>>> Thanks -
>>>>>> Susan
>>>>>>
>>>>>
>>>>> Sure Susie, they do the same thing every comnpany
>>>>> does-- charge all the market will bear trying to stay
>>>>> 5-10% below the ouch point so sales won't drop off...
>>>>
>>>> Ummm, did you read the question?
>>>>
>>>> The question was "why are two phones with similar
>>>> features priced so *differently*?".
>>>>
>>>> -Quick
>>>
>>> Ummmm, Quickie, did you understand what I said? It's
>>> because they can get it...
>>
>> The question was WHY?
>> example:
>> Phone A: Clamshell with camera 50$
>> Phone B: Clamshell with camera 100$
>> same features, look and feel.
>>
>> The question was why?
>>
>> Here is a clue before you respond:
>> "because they can" is not an answer.
>>
>> -Quick
>
>
> Oh Quickie, in fact it is the answer. Just because you
> don't like it doesn't make it not so.
>
> Remember when you had your lemonade stand? You could
> charge whatever you liked. You could vary your prices by
> time of day or by customer or by weather. You could
> charge more late on a hot Saturday afternoon when people
> were sweaty from cutting the grass so demand was higher.
> Or you could give a unit price reduction for volume
> purchases-- say when a soccer mom with a van full of kids
> pulled up. You could charge the neighborhood grinch more
> because you didn't like him-- or give a special discount
> to you friend Billy or the little redheaded girl you had
> a crush on.
>
> You sound like a card-carrying member of the Flat Earth
> Society-- or possibly just someone whose financial and
> economic education ceased back in the first or second
> grade;-)

Well, I can see you're trying. You gave reasons for "why"
in the lemonade stand analogy.

it was a hot Saturday,
people were hot from cutting the grass,
volume pricing,
sudden influx of kids,
Grinch,
friend,
crush...

Very good. These are reasons for "why".
Now try for the original question.

*Why* do similarly featured phones from different
manufacturers vary so much in price?

Is it because the manufacturer price to VZW is very
different? Is there a large brand name value difference?
If it was simply because "they can" then they would
charge the same for both wouldn't they? Why less
for one than the other? I don't know if we can state the
question many more different ways... please try again.

-Quick

Archived from groups: alt.cellular.verizon (More info?)

"dr.wireMORE@formerVZW-MidWESTma" <dr.wireMORE@formerVZW-MidWESTma.com> wrote in message
news:J06de.44$Jz2.22@newssvr19.news.prodigy.com...
> As like any other business: if new connections are down, the prices of phones will go down.

I also suspect that phone manufacturers make the phones in batches that
are sold to the carriers. (You can see that something like that happened
with the Audiovox 9900).

VZW will effectively discount models based on how many are left and the
other factors you mentioned.

Roger

Archived from groups: alt.cellular.verizon (More info?)

In news:SvWdnSuTKoygn-vfRVn-2g@comcast.com,
* * Chas <dnafutz@aol.spam.com> typed:
>
> I'm a manufacturing engineer. I've been consulting in high tech
> industries for over 25 years. I've been speculating the costs to
> manufacture a cell phone.
>
> The battery is probably the most expensive component. The screen would
> be next.
>
> From a conceptual point of view, a cell phone is nothing more
> technical than a hand held calculator and a transistor radio with a
> transmitter. My first HP statistical calculator cost several hundred
> dollars. Several years later I bought the same exact model for $9.95!
> Same thing with the early transistor radios.
>
> My first Fujitsu 3W analog transportable cell phone cost $1200 in
> 1987.
>
> The molded plastic cases cost pennies. There are no more than a few
> dollars worth of electronic components in a cell phone. Assembly is
> almost completely automated. I'm thinking that the average cell phone
> costs less than $25 to manufacture. Cheap models, a lot less.
>
> If you work backwards, say a phone has a list price of $150, the
> wholesale cost is going to be somewhere between 33% to 66% of the
> retail price. If there is a middle man, they get their cut also and so
> on.
>
> Chas.


Your analysis is looking at the Recurring cost - There is still the
Non-Recurring costs associated with Engineering, Tooling, Testing, Etc
required to get a product ready for production that has to be recovered.

Archived from groups: alt.cellular.verizon (More info?)

> From a conceptual point of view, a cell phone is nothing more
> technical than a hand held calculator and a transistor radio with a
> transmitter.

Maybe if all you doing is analog. CDMA is non-trivial. (Ok it is
trivial if you don't care about power, but all cell phones do).

Pretty much every CDMA handset (I believe the exception is Nokia)
use Qualcomm chips. Start at http://www.cdmatech.com/chip_select.jsp
and try to work out how much they cost.

The MSM 5100 is what is in my LG VX4400 from 2003. All the chipsets
include ARM cpus, radio chips, and various other paraphenalia that
many handset manufacturers don't use such as BlueTooth and flash cards.
Don't forget the legal requirement to do GPS since 2003 or so,
various protocols and application APIs that need to be supported,
software for the internal applications such as the phonebook etc.

Read these:

http://denbeste.nu/cd_log_entries/2002/10/GSM3G.shtml
http://denbeste.nu/cd_log_entries/ [...] orks.shtml

I am looking forward to your "cheap" phone :-)

Roger

Archived from groups: alt.cellular.verizon (More info?)

"IMHO IIRC" <nospam@nospam.net> wrote in message
news:m1Bde.7730$ye1.1553@okepread06...
> In news:SvWdnSuTKoygn-vfRVn-2g@comcast.com,
> * * Chas <dnafutz@aol.spam.com> typed:
> >
> > I'm a manufacturing engineer. I've been consulting in high tech
> > industries for over 25 years. I've been speculating the costs to
> > manufacture a cell phone.
> >
> > The battery is probably the most expensive component. The screen
would
> > be next.
> >
> > From a conceptual point of view, a cell phone is nothing more
> > technical than a hand held calculator and a transistor radio with
a
> > transmitter. My first HP statistical calculator cost several
hundred
> > dollars. Several years later I bought the same exact model for
$9.95!
> > Same thing with the early transistor radios.
> >
> > My first Fujitsu 3W analog transportable cell phone cost $1200 in
> > 1987.
> >
> > The molded plastic cases cost pennies. There are no more than a
few
> > dollars worth of electronic components in a cell phone. Assembly
is
> > almost completely automated. I'm thinking that the average cell
phone
> > costs less than $25 to manufacture. Cheap models, a lot less.
> >
> > If you work backwards, say a phone has a list price of $150, the
> > wholesale cost is going to be somewhere between 33% to 66% of the
> > retail price. If there is a middle man, they get their cut also
and so
> > on.
> >
> > Chas.
>
>
> Your analysis is looking at the Recurring cost - There is still the
> Non-Recurring costs associated with Engineering, Tooling, Testing,
Etc
> required to get a product ready for production that has to be
recovered.
>

I think that you are making some assumptions about manufacturing costs
based on the reinvention of the wheel. Technology does not exist in a
vacuum. There are very few real innovations in cell phone technology -
they have become consumer appliances!

The cost of development is spread throughout many component suppliers
and is amortized into the initial pricing. There's a lot of
interchangeability in electronic components so development costs are
indirectly shared among many phone makers. Also, the 1st $350 phone
produced costs a lot more to manufacture than the 500,000th phone.
Cell phone prices are driven by demand!

When Nokia, Moto, Sanyo etc. brings out a new model the changes from
the previous releases include any new bells and whistles, any cost
savings by using less expensive components and quality improvements in
previously problematic components.

The digital cameras in cell phones are 1st generation technology. Most
of the other bells and whistles have come from PC and laptop
technology. Transmitter and receiver technology goes back to the
1920's!

The manufacturing life cycle for today's cell phones is less than a
year then the next model comes out. Unlike in the PC world, cellular
providers have kept a leash on the phone manufacturers to keep
inventory management under control.

Chas.