Speaking of false advertising....

Yes the MSRP is high and reflects the carrier's cost (plus markup) of the device. This is why subsidized phones are locked - and why 2 year contracts are required. The carrier is giving you a, say, $700 phone for $100-$200 (let's say their cost is $500), with the caveat that you are required to retain a certain level of service for 24 months, which gives them opportunity to recoup the loss on sale of the phone. The ETF is supposed to cover that loss in case you terminate early. In essence, it's an extended payment plan with a large d/p.

It's not a shady business practice, it's a fact of life.

Quote from Dr. J : Yes the MSRP is high and reflects the carrier's cost (plus markup) of the device. This is why subsidized phones are locked - and why 2 year contracts are required. The carrier is giving you a, say, $700 phone for $100-$200 (let's say their cost is $500), with the caveat that you are required to retain a certain level of service for 24 months, which gives them opportunity to recoup the loss on sale of the phone. The ETF is supposed to cover that loss in case you terminate early. In essence, it's an extended payment plan with a large d/p. It's not a shady business practice, it's a fact of life.

I understand what you are saying, but my charge is that is BS. These don't cost that to make, the carriers do not pay this amount to the manufacturer, and a statistically insignificant # of people have ever paid this price for the phones.

Don't get me wrong, I am capitalist all the way. If they can make these for $25 and sell them for $750, more power to them. But again, my accusation is deceptive business practices since I don't think these cost anywhere near that and they are using this deception to up-sell, oversell and generally rip people off.

Just taking the iphone as an example, reports suggest [gizmag.com] that the cost of the components of the iphone are right around $200 ($187 according to their estimate). However, this does not include R&D, labor, advertising, shipping or patent licenses. So while I really don't think a $750 price tag is justified, I *do* think it's costing them more than the subsidized cost to produce & sell them.

Now, as a BUSINESS we often do get stuck buying a phone at full price. We get someone a phone under a 2 year contract & they drop it in the toilet or back over it with thier car, and we have no choice but to pay full price for a replacement if they're still under contract. I can imagine this is where the bulk of 'full cost' purchases come from.

As far as this being false advertising, I see what you're trying to say but you're off a little on that - false advertising is promising X but delivering Y. What I think you mean is price fixing or collusion - if all of the mfrs are getting together & agreeing to keep all of the costs artificially high, that's collusion. I'm guessing they avoid this by pointing to the subsidized price & saying, 'Look! That's less than what it costs us to make them!' But I agree that all of the MFRs DO seem to keep their unsubsidized costs VERY high.

No way the actual retail on a Brand new, unlocked Motorola Droid Razr Maxx is $300. The price the carrier is quoting is close to what retail on the phone is. Now you can get new unused phones on ebay for a lot cheaper, not sure what the source is on these. They are like $325ish. Used phones are not worth much as are most used 2+ year old electronics. Cell phones especially the technology and software change a ton, Used phones also get pretty beat up in a 2 year period. While you said your phone is not even 2 years old, that phone was introduced in August of 2010, and had a whole host of issues. So it's not exactly surprising that its worth so little from the carrier. Honestly its worth more to you in case you drop your new phone you have something easily to activate until you figure out what you are going to do to get a new one (ebay). Consider yourself lucky in the fact you know about how to pickup a cheaper phone out of contract on ebay in case you ever need to vs going to the store and paying retail. There is also a reason why Verizon specifically is a hot stock right now and pays out one of the highest dividends to its shareholders every quarter.

The MSRP of this post is $800 but I'm going to give it to you for $0 as long as you buy a contract saying you won't read it.

And dealgate, believe it or not there are people that pay those high prices for those divides. Think of the pre-release original iPhone hype. Makes VA price look like a bargain.

Quote from dealgate : I understand what you are saying, but my charge is that is BS. These don't cost that to make, the carriers do not pay this amount to the manufacturer, and a statistically insignificant # of people have ever paid this price for the phones. Don't get me wrong, I am capitalist all the way. If they can make these for $25 and sell them for $750, more power to them. But again, my accusation is deceptive business practices since I don't think these cost anywhere near that and they are using this deception to up-sell, oversell and generally rip people off.

Since when do companies just charge their "cost". People have broken down what phones have cost to make and they are around $150 and this doesn't even include all the R&D and licensing.

As to your original complaint about how your 2 year old phone is only worth $24 now...well no shit tech moves quickly and particularly in the mobile phone market. Also you are giving your phone back to a retailer, which is akin to trading in your car to the dealer. HTC, Morotola and other manufacturers are cranking out phones because that is how they drive their business. Apple on the other hand has the luxury of only spitting out a phone once a year. I've resold my previous gen iphone for a "profit" over the amount I paid for it on contract. (e.g. I paid $200 for the phone + tax and I sell it for $300). I've done this with the Iphone 3G and the Iphone 3Gs. I haven't upgraded to the 4S and likely won't, but I will upgrade to the next Iphone.

You filed a complaint over the MSRP being too high? Wow.

Like its been said already, some people do not like contracts and choose to buy it without a contract. That is the price they have to pay.

Quote from PiratesSayARRR : As to your original complaint about how your 2 year old phone is only worth $24 now...well no shit tech moves quickly and particularly in the mobile phone market. I've resold my previous gen iphone for a "profit" over the amount I paid for it on contract.

With technology already so great, this is why you can just use a 2-year-old, $24 phone nowadays and usually be happy.

I sold a couple new contract phones and then went back to my old one. Selling the new phone paid for a decent portion of the new contract. Plus, retro things are almost always cool. Or, at least, people can be convinced they are cool even if your only real reason to have them is because they're cheaper.

I've considered going really retro and using a Startac. But the touchscreen and camera on Startacs really suck.

As for MSRP, I'm not understanding the main OP complaint. Is it a complaint about the stated MSRP? Or is it a complaint about the actual price they are sold at? Or about the actual price they are sold at vs. the stated MSRP? Or how you can get the phones "cheaper" with a contract?

When the Thunderbolt was new, it was $700 at Best Buy without a contract. I don't care what the MSRP was because basically no end-consumer cares what the MSRP of something is. Product X is $900 MSRP. Well retailers all sell it for $700 anyway, so who cares what the MSRP is.

btw, MSRP = "Manufacturer's Suggested Retail Price". Note that we see the same terminology with cars, but who the hell actually walks in expecting to pay MSRP?

The MSRP isn't based on what a product is worth; it's based upon what the manufacturer thinks the market will pay. No laws have been violated.

Quote from PiratesSayARRR : Since when do companies just charge their "cost". People have broken down what phones have cost to make and they are around $150 and this doesn't even include all the R&D and licensing. As to your original complaint about how your 2 year old phone is only worth $24 now...well no shit tech moves quickly and particularly in the mobile phone market. Also you are giving your phone back to a retailer, which is akin to trading in your car to the dealer. HTC, Morotola and other manufacturers are cranking out phones because that is how they drive their business. Apple on the other hand has the luxury of only spitting out a phone once a year. I've resold my previous gen iphone for a "profit" over the amount I paid for it on contract. (e.g. I paid $200 for the phone + tax and I sell it for $300). I've done this with the Iphone 3G and the Iphone 3Gs. I haven't upgraded to the 4S and likely won't, but I will upgrade to the next Iphone.

I am not complaining at all about the $24 for my old phone. It proves my point! I used it as proof that the phone prices are artificially inflated in order to make people think they are getting a better deal. They are not. That is my point. A 20 month old phone being worth $24 tells me that the MSRP of the phone is more like maybe $150. Not $650 or whatever the fascinate was being touted as when released.

All I am saying is that Verizon and most of the other carriers are using deceptive business practices to hook people into basically indentured servitude. They are not selling something for 10 or 20% below MSRP; They are selling something for 100% below MSRP. The only way they would do this is if the MSRP was not only imaginary, but in collusion with the other carriers and the phone manufactures.

This is something where you really need to think outside the box. I don't think most of the people on this forum are capable of this level of thought process. Those that are stating I am complaining because the phone prices are too high really have no capability to think on this level at all. This is more of an esoteric argument. But I think you (PiratesSayARRR) are capable of thinking on this level.

Quote from dealgate : I am not complaining at all about the $24 for my old phone. It proves my point! I used it as proof that the phone prices are artificially inflated in order to make people think they are getting a better deal. They are not. That is my point. A 20 month old phone being worth $24 tells me that the MSRP of the phone is more like maybe $150. Not $650 or whatever the fascinate was being touted as when released. All I am saying is that Verizon and most of the other carriers are using deceptive business practices to hook people into basically indentured servitude. They are not selling something for 10 or 20% below MSRP; They are selling something for 100% below MSRP. The only way they would do this is if the MSRP was not only imaginary, but in collusion with the other carriers and the phone manufactures. This is something where you really need to think outside the box. I don't think most of the people on this forum are capable of this level of thought process. Those that are stating I am complaining because the phone prices are too high really have no capability to think on this level at all. This is more of an esoteric argument. But I think you (PiratesSayARRR) are capable of thinking on this level.

I don't think the $24 proves your point. We can agree that these consumer technology products have a relatively short lifespan yes? Also you agree that you are getting that $24 quote from a retailer who won't make any money off of it (that I'm aware of). If you were to take that same phone and privately list it you would likely get $75-$100 for it.

Collusion is a fairly serious charge and while it's possible these companies are bearing a tremendous risk.

Do I personally think $700 is outrageous for a device...yes and no. What a smart phone has become is essentially a portable computer. Let's compare it to the ipod touch for a moment. A 16gb ipod touch will cost you $300 and it contains both wifi and bluetooth. A 16gb iphone without contract is $649. You are paying a $349 premium for a device with the same memory and near same functionality. So is the difference worth $349. (Main differences: Chip for transmitting via cell phone radio towers, faster processor, higher resolution screen, different software). The point is these things add up and probably necessitate the higher fee. I'm sure there are licensing fees being paid so they can use the cell phone chips (people create and patent their ideas in hopes of one day some company needing their idea: hence patent litigation).

As you may recall cell phone companies used to charge $200 cancellation fee, but it is has since gone higher (I believe $350 at the top end). What some "customers" were doing was signing up for a contract and purchasing the phone at a discounted price. Then flipping the phone and paying the cancellation fee while reaping a profit. This seams to suggest that the MSRP is much higher than your $150 claimed price point. While I do understand where you are coming from I don't believe there is true collusion occurring and forcing persons into indentured servitude. Personally I know I can't live without a cell phone (I would like to think I could but for my business and personal life it requires one).

I think there should be some clarity as to what the cell phone company is paying for the device vs MSRP. Obviously, as you indicate they are not paying MSRP, which is expected because MSRP is the amount the consumer pays.

I can tell you a few years ago when my firm negotiated with ATT on our monthly service requiring 35 blackberrys I put in a provision for them to sell us Blackberry Curves at $100/each if we needed them due to damage or loss. They obliged for 1 year to do so. It definitely saved us money since we needed roughly 20 replaced within a year.

It used to bother me but now that we have eBay I can buy a new phone for a couple hundred dollars without having to sign a new 2-year contract with my provider!