On Call: The downside of service rebates
Service rebates may get you a cheaper phone, but they're not all good. CNET tells how they dumb down the cell phone selection in the United States.
Q: I was wondering why U.S. carriers have not picked up Nokia's N-series phones. Why wouldn't a carrier like
- 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.
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
The problem with the N-series phones is that they cost well over $500 (the fancy
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
Finally, it's only in the last three years that U.S. customers have begun to demand more features from their phones besides making calls. Think about how long it took for us to get hooked on texting. As that demand grows, we should see U.S. carriers offer more high-end models. Or at least I hope so.
Q: I'm a long time
- Geoffrey
A: Of the two handsets that you mention, I think that there's a better chance that Verizon would pick up the Pre. Sprint will have the device as an exclusive for period (we don't know how long), but eventually the Pre should land at other carriers. Verizon is a likely candidate, particularly since Palm wouldn't have to develop an alternate version (Sprint and Verizon use CDMA technology).
Unfortunately, I'm not optimistic in the least that Verizon will get the iPhone. To make that possible, Apple would have to develop a CDMA version, which I think is unlikely.
Q: Will Verizon continue to offer all
- Gabriel
A: There will be some consolidation when the merger finishes. We don't know how the phones will fall just yet, but since Verizon is the buyer here, I'd bet that more Alltel models will be retired. The good news is that since the two carriers share the same CDMA technology, they already share models that either are identical or very similar. Also, if you already have an Alltel phone you'll be able to use it with Verizon for as long as it lasts.
Q: I am a
- Kyle
A: Sorry to be the bearer of bad tidings, but I checked with Sprint and it turns out that you are ineligible for the prorated ETF. Here's what I got from Sprint. "The prorated ETF policy applied to all new service agreements beginning on or after November 2, 2008, regardless of whether it's a new customer with a new service agreement or an existing customer who has renewed his/her service agreement. The prorated ETF policy does not apply to service agreements beginning before November 2, 2008."