Nexus One & HTC Incredible - Same Day Release?

[xfuchsiax]

I was thinking perhaps it might make sense for the Nexus One and the HTC Incredible to be released on the same day if Verizon is subsidizing the N1 at all. VZW has to know that plenty of people are planning to buy "whichever comes first".

If VZW will make more money per unit on the Incredible (sold through them) than they would per unit on the N1 (sold through Google), then they would NOT want the N1 to release first because it would possibly take away sales of the Incredible.

Does this theory make sense to anyone else? Do you think VZW has any real control over the release date of the N1?

 

[xmonkey]

Could make sense, and yes I see them as having control over when the N1 is released (unlike ATT, since it isn't subsidized and they don't need permission to use those 3G bands/chipset as far as I know)... but I'd hope this isn't the case because it seems they would have to hold the N1 back entirely for revenue reasons since I have to believe the CDMA N1 is ready to go.

As a consumer this prospect sucks, so I hope it isn't true.

 

[Musky]

Being an indirect Verizon dealer for several years I came to the conclusion that Verizon (and most other carriers as well) make very little on the sales of their handsets. They make the money on the usages, that's why the phones cost less the longer the contract (2 years vs 1 year). And since they will make their money whether they sell the phone or Google sells it, I can't see how when each phone is released will effect their revenue.

Our job was to sell plans and get contracts signed, even if we lost money on the handsets, which as indirect dealers we usually did, but then made it back on the other end providing the consumer kept the contract for at least six months.

Anyway, that's my 2 cents, which is about what it's worth. LOL

 

[Roller]

I think it's looking like they will come out on the same day. Remember the Nexus One won't be in stores, so I think VZW will want to have another high end device to show off in stores.

 

[tbeas]

Verizon makes money off of contracts, not devices. Think about this: you are buying a $600 phone for $199 (I hope!) and Verizon is eating the other $400. While they lose $400 on the sale of the phone, your 2-year contract priced at $80 per month is bringing them almost $2000. Meaning they are making over $1500 over that 2-year period.

Now assume you don't buy the phone from Verizon. I'm guessing even if you get it at the subsidized price, Verizon isn't paying that subsidy (I could be wrong here). That is an extra $400 per customer that they are gaining.

 

[Outatime]

I think it's looking like they will come out on the same day. Remember the Nexus One won't be in stores, so I think VZW will want to have another high end device to show off in stores.

And I think it's that exact thing that's going to burn me and put an Incredible in my hands. My NE2 isn't up until July, but I have gotten numerous "early upgrade" offers from VZW on the Storm 2 and the Droid. I expect that they will let me upgrade to the Incredible in-store, but as far as the N1 (which I would prefer) I'm going to be out of luck.

And I ain't waitin' till July

 

[Droidz]

And I think it's that exact thing that's going to burn me and put an Incredible in my hands. My NE2 isn't up until July, but I have gotten numerous "early upgrade" offers from VZW on the Storm 2 and the Droid. I expect that they will let me upgrade to the Incredible in-store, but as far as the N1 (which I would prefer) I'm going to be out of luck.

And I ain't waitin' till July

Well, at the rate that Verizon is announcing new phones I'd say there's actually a pretty good chance you'll be waiting til July.

If that does unfortunately happen I'll probably just hold out for the EVO and drop VZW all together.

 

[ZRock]

Verizon makes money off of contracts, not devices. Think about this: you are buying a $600 phone for $199 (I hope!) and Verizon is eating the other $400. While they lose $400 on the sale of the phone, your 2-year contract priced at $80 per month is bringing them almost $2000. Meaning they are making over $1500 over that 2-year period.

Now assume you don't buy the phone from Verizon. I'm guessing even if you get it at the subsidized price, Verizon isn't paying that subsidy (I could be wrong here). That is an extra $400 per customer that they are gaining.

For starters, while the phone may be 600 retail, that is the MSRP, not the cost to VZW. Secondly, the math is WAY off because it DOES cost vzw something every time we push that magic call button or stream 300 movies to our droids . Yes they make more over the 2 years than they do on the cost of the phone however that is an extreme example you are offering.

 

[gavin77]

Droidz, I agree with you....if Verizon doesn't do something before this summer, I'm probably gone too. Between the Evo on Sprint and the new Iphone 4G, which I'm sure is going to be sweet as well, why would I sit around and wait for Verizon to figure things out? They need to release the Incredible and N1 right now......before this summer when those two BEASTS are released....

 

[Phydeaux]

Being an indirect Verizon dealer for several years I came to the conclusion that Verizon (and most other carriers as well) make very little on the sales of their handsets. They make the money on the usages, that's why the phones cost less the longer the contract (2 years vs 1 year). And since they will make their money whether they sell the phone or Google sells it, I can't see how when each phone is released will effect their revenue.

Our job was to sell plans and get contracts signed, even if we lost money on the handsets, which as indirect dealers we usually did, but then made it back on the other end providing the consumer kept the contract for at least six months.

Anyway, that's my 2 cents, which is about what it's worth. LOL

I disagree, I think carriers DO make a moderate profit off handset sales.
Consider how many people out there use a cheap, dumbphone device -say, in the $100-150 range- and pay a subsidized price for it over the course of two years (or even one year). With subsidized pricing costing in the ballpark of $20/mo. more than unsubsidized prices, the room for profit becomes evident.
Also consider the people -myself included- who is continuing to pay the subsidized price after my 2-year has ended. It's sort of like continuing to make car payments after your car is paid off.
Profit margins on smartphones may be less, but I think we can all agree carriers certainly are not taking a loss by subsidizing any of these devices.

With this in mind, I think it's possible that Verizon DOESN'T want the N1 to release before Incredible. Everyone who buys an N1 before Incredible comes out is lost money for Verizon.

 

[Flaring Afro]

I disagree, I think carriers DO make a moderate profit off handset sales.
Consider how many people out there use a cheap, dumbphone device -say, in the $100-150 range- and pay a subsidized price for it over the course of two years (or even one year). With subsidized pricing costing in the ballpark of $20/mo. more than unsubsidized prices, the room for profit becomes evident.
Also consider the people -myself included- who is continuing to pay the subsidized price after my 2-year has ended. It's sort of like continuing to make car payments after your car is paid off.
Profit margins on smartphones may be less, but I think we can all agree carriers certainly are not taking a loss by subsidizing any of these devices.

Wait who's paying for the phone per month? And they don't make profit as it costs a lot to make a phone, even the cheaper ones. There's a reason why the N1 is over $500 without a contract, and if you buy it through the new tmobile contract tmobile is paying google and htc and losing money. Verizon will lose money of each incredible and N1 as well, but make it up with the plan payments.

 

[Deleted User]

the point of subsidizing a phone for a company is to give the consumer the phone at a lower price, in return they have to sign a contract. Basically the phone cost 600 retail and then verizon subsidizes it in order for them to make money off of us from the monthly payments. And since subsidizing is basically verizon paying for the product before hand and having us pay it off alongside our monthly payments. And thats the reason ffor a Early Termination Fee in order for them to get the money back just in case we decide to cancel our contract

 

[Geddy]

Verizon does make some money off of some phone subscriptions to cover the cost of a subsidized phone. However, the monthly payment on a 2 year contract isn't absolute profit beyond that.

There are many other costs associated with a customer that drop overall profits such as the cost for customer support (call center reps), operational costs (tower maintenance), and marketing and advertising costs (retention and promotional materials) to retain customers or to prompt further upgrades in service.

The overall cost per customer that Verizon spends on these things might surprise you. Verizon undoubtedly loses money on some customers and breaks even on others as well.

 

[tbeas]

For starters, while the phone may be 600 retail, that is the MSRP, not the cost to VZW. Secondly, the math is WAY off because it DOES cost vzw something every time we push that magic call button or stream 300 movies to our droids . Yes they make more over the 2 years than they do on the cost of the phone however that is an extreme example you are offering.

Yes they do get it below MSRP, but not much. They still take a very large hit on the subsidized phones. And the math is not WAY off because I never said that was all net profit, I just said that is where they make their money - which is true.

 

[hornyhippo]

i'm sick of waiting, im going to get the first phone that comes out so I doubt it come on same day. I'm beginning to hate verizon now, incredible and n1 absent from ctia, verizon were probably scared of the evo having superior specs and opt out. 4g is already coming so I better get phone now.

 

[Nathan Hale]

Yes, everyday that goes by lowers Verizon's chances of my sticking with the N1 and increases the liklihood I'll wait for the Evo.

A man will only wait so long for his date to ready herself upstairs before he leaves the flowers on the ground and goes out to look for another date.