Q: I was wondering why U.S. carriers have not picked up Nokia's N-series phones. Why wouldn't a carrier like AT&T or T-Mobile want such high-end handsets to attract customers?
- Zoheb
A: There are a few answers, Zoheb, but they all boil down to money. More so than in other countries the cell phone market in the United States has long centered on the service rebate. Carriers discount phones to attract customers and their contracts, while customers are trained to expect free or discounted handsets. While this dynamic is beginning to change due to the growing popularity of unlocked phones, service rebates largely rule the day here.
Nokia N96
(Credit: Corinne Schulze/CBS Interactive)Though the rebates have their upside--customers can get $200 knocked off the price of a nice smartphone--they have their downsides as well. And I'm not talking about service contracts. Rather, the widespread use of service rebates has helped to "dumb down" the cell phone selection in the United States. With notable exceptions, carriers tend to keep their phones below $300 to make them as affordable as possible.
The problem with the N-series phones is that they cost well over $500 (the fancy Nokia N96 is $776 unlocked). So even with a service rebate they're going to remain pretty expensive. Sure, there will be customers like yourself who will be willing to buy one, but that's not enough incentive for a carrier to buy a several thousand of them. Instead, they're going to pick handsets that will sell in the biggest numbers.
T-Mobile G1
(Credit: Corinne Schulze/CBS Interactive)We also have to remember that the N-series phones are complicated with a lot of different features. U.S. carriers tend to be in the driver's seat when it comes to choosing phones for their lineups. They have a lot of say in how the phone looks and what features it has. Thanks to the iPhone and the T-Mobile G1 this is also beginning to change, but they still like to exert their control. I'd wager than the N-series phones are simply too complicated for U.S. carriers. There are too many parts and features that the carriers can't control. Also, I'm sure that carriers haven't figured out how to monetize all the services on a handset like the N96. That's yet a another deterrent against picking it up.... Read more
Nothing is constant in the cell phone world and carriers are no exception. In the past five years, we've seen Sprint scoop up Nextel, AT&T Wireless merge into Cingular, and Cingular become the new AT&T. And I won't even mention the small regional operators that disappeared into the folds of a national carrier.
The latest carrier casualty is Alltel, which , as of last Friday, merged with Verizon Wireless. Like any corporate marriage, there are plenty of details to sort out so this one won't be completed for some time. But if you're a customer of either carrier, I'm sure you have questions on how the merger will affect you. So, to help you understand how the merger will proceed, I've created this handy FAQ that expands on Verizon's own FAQ on its Web site. If you have any additional queries, please send them on and I'll do my best to answer them.
Q: When will the merger be completed?
A: It will be a few months until Verizon and Alltel are one company. For now, Verizon is the legal owner of Alltel. Once the deal is done, Verizon will outpace AT&T as the largest U.S. wireless carrier with an expected 78 million customers.
Q: What will the company be called?
A: Verizon is the buyer here so the Alltel name and branding will disappear starting in the second quarter of this year. Most current Alltel customers will become customers of Verizon automatically.
Q: How much is the deal worth?
A: Verizon is paying $5.9 billion for Alltel and assuming $22.2 billion in Alltel debt for a total acquisition worth $28.1 billion.
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