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Comments: 311 + -   Google's Nexus One, a Steal At $49 Unlocked? on Saturday February 06 2010, @10:47PM

Posted by kdawson on Saturday February 06 2010, @10:47PM
from the such-a-deal dept.
google
gjt writes "I initially posted a piece ragging on the Nexus One. But then a commenter pointed out a problem with my initial logic, and after doing some math I concluded that the $529 unlocked/unsubsidized Google Nexus One gPhone is much cheaper than it appears to be. In fact it's only $49 over two years — and that's unlocked! Google likes to say that the Nexus One represents 'Our new approach to buying a mobile phone.' But it actually seems as though T-Mobile deserves most of the credit by providing a $20/month discount to customers who purchase an unsubsidized phone, a fact that didn't seem to get much attention when T-Mobile created the plan last October."
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  • Oh god (Score:5, Insightful)

    by sopssa (1498795) * <sopssa@email.com> on Saturday February 06 2010, @10:47PM (#31049844) Journal

    So, the real cost of an unlimited everything plan is $99.99/mo for subsidized phone buyers. Compare that to the $79.99/mo plan for unsubsidized buyers and that’s a $20/mo savings. Over two years, that’s a whopping $480 savings.

    So, $529 – $480 yields a final purchase price of just $49!

    Except that the phone is still $529! You're just buying the most expensive package available and think you're saving money, which makes no sense.

    Everything in Europe has been traditionally unlocked and unsubsidized phones. You buy the phone and then you get a subscription from your favorite operator. They have added the subsidized option but almost no one buys his/her phone like that. It's just stupid, which the article writer seems to have "discovered" here.

    • Re:Oh god (Score:5, Insightful)

      by ari_j (90255) on Saturday February 06 2010, @10:52PM (#31049872)
      Married men understand the principal better. They are constantly saving money, thanks to their wives buying things they don't need and won't wear at 20% off.
      • Re:Oh god (Score:5, Funny)

        by codepunk (167897) on Saturday February 06 2010, @11:01PM (#31049912)

        Sounds like we are married to the same woman.

      • Re:Oh god (Score:5, Funny)

        by CrashandDie (1114135) on Sunday February 07 2010, @03:39AM (#31050944)

        Married men understand the principal better.

        Indeed, that's why I've stopped asking my wife to come to parent-teacher conferences.

        • by eihab (823648) *

          But it's 20% OFF!!!

          No honey, we can't buy it because it's too expensive and we don't need it!

          Now, Can we keep this off of Slashdot please?

        • Re:It's fuzzy math (Score:4, Interesting)

          by vadim_t (324782) on Sunday February 07 2010, @08:29AM (#31051816) Homepage

          Seriously, I never understood the whole "you have to spend money to save money" mentality that so many people have.

          I understand it this way: If you buy too cheap, you may have to buy the same thing of kind again in the future when it breaks, or turns out to be not good enough for your needs.

          For instance, my recent experiences with that:

          1. I bought a high end point and shoot camera before going on vacation. Took me about 2 days to realize that it still wasn't good enough, and that I couldn't make it better by putting another lens on it, because they're not interchangeable. Now I have a DSLR and am much happier with the results. It's a midrange sort so it could be better still, but with a DSLR I have enough flexibility that I almost never happen to be in a situation that a better camera would make something significantly better. That was a waste of money on the P&S.

          2. Some time ago I bought a fairly high end phone... with a T9 keyboard. It was capable of fairly decent web browsing, and could run applications, but was utter horror to type anything with. I'd have been much better off with something with a real keyboard. I could have got that for $50 more. In hindsight that was a waste. Now I have a N900 and couldn't be happier.

          3. I tried VIA's MiniITX boards as a way of having a "cheap server". Turned out to be anything but, because it was horribly unreliable, so after months of fighting with it, it now sits in the closet.

          So, overall, buying too cheap often turns out expensive, when the cheap product isn't good enough and has to be replaced. Then you end up buying two things instead of one.

    • Re:Oh god (Score:5, Informative)

      by santax (1541065) on Saturday February 06 2010, @10:56PM (#31049886)
      I have no clue in what country you life but I assure that everything in the Benelux + Germany is locked. You get the phone for 'free' and a laptop or in some cases even a car.... but the phone is locked and your contract too. Almost nobody buys a phone here (unlocked for the full price) and then goes to see which provider is best. Wouldn't make sense either, all the providers have equal coverage and price difference's are small.
      • Re:Oh god (Score:5, Informative)

        by TBoon (1381891) on Sunday February 07 2010, @12:45AM (#31050402)
        Here in Norway you can easily get both locked and unlocked phones, though pretty much all advertised products are locked. Typically for 1 year, after which unlocking is a phonecall away. Done this myself twice, never any hassle. However, with the exception of the phone I got 4 years ago (locked a single month, at a 150 euro discount), taking the bundled contracts seem to always come out more expensive than getting an unlocked phone and choosing another contract that suites your usage pattern. No idea how the sales-ratio between locked/unlocked phones are.
      • Re: (Score:3, Interesting)

        by Teun (17872)
        When you buy a phone including a plan it'll no doubt be locked, but it's real easy to get the same phone without a plan.

        Especially in the larger cities it's easy to find a small shop that for a small fee will unlock just about any phone and there's nothing illegal about it.

        Because I feel it's giving me more software freedom than a Droid I'm looking at a Nokia N900 right now, not as a phone but purely as a mini computer with the option of VOIP, it's all over the place, unlocked and for about €550.00.

        • Re: (Score:3, Informative)

          No. Locked phone = no SIM swapping, neither at home nor abroad. One exception: MVNO that use your original provider's network, but that's not very interesting.

          I don't know about the rest of Europe, but the law in France forces the operator to unlock your phone for free after 6 months (or for a fee up to € 65 before). So the locked phone issue only exists for the first 6 months of a contract (you've got to request the unlock, though). I always keep a previous phone, just in case.

    • Re:Oh god (Score:5, Informative)

      by maxume (22995) on Saturday February 06 2010, @10:56PM (#31049888)

      Yeah, the more sensible comparison is $2,579 for the subsidized phone+contract, and $2,449 for the unsubsidized phone+contract.

      • Re:Oh god (Score:5, Informative)

        by wfeick (591200) on Sunday February 07 2010, @11:46AM (#31052650)
        Ah, but that's only after two years. If you don't upgrade, the subsidized phone plan ends up being way worse after 3 or even 4 years. That's the big reason the phone companies want you to go for the subsidized plan - they get to ream you after the 2 years.
          • Re: (Score:3, Informative)

            by wfeick (591200)
            Agreed, if it's an option. It doesn't seem to be an option with many (most?) carriers though. They like it that way.
    • by Jurily (900488)

      Everything in Europe has been traditionally unlocked and unsubsidized phones.

      For a long time, I didn't even understand why /. is so hung up about phone plans. "Why don't you just buy a prepay one?"

      • Feature phones (Score:3, Informative)

        by tepples (727027)

        For a long time, I didn't even understand why /. is so hung up about phone plans. "Why don't you just buy a prepay one?"

        I'm pretty sure it has a lot to do with the fact that Slashdot is hosted and operated in the United States for the primary benefit of readers in the United States [slashdot.org]. The handsets sold in big-box stores in the United States for use with prepaid plans in the United States are still locked to one provider, and they're feature phones rather than smartphones. Feature phones tend to have fewer apps because 1. there isn't a lot of CPU power, and 2. BREW is even more restrictive than Apple's App Store.

        • Re: (Score:3, Interesting)

          by LordKronos (470910)

          I have prepaid, I have excellent credit, and I do use my phone (though I suppose by a lot of people's standards it's barely using it). Over the course of 4 years, my highest monthly usage has been about 130 minutes and my lowest is about 25 minutes, so my monthly "bill" ranges from $2.50 to $13.00, with $4-6 being typical. My wife also has the same setup, and her typical usage is around $13-$15 a month. Our highest combined monthly usage over the 4 years was about $26/month total.

    • Perhaps, but T-Mobile is, as far I know, the only US carrier which gives any discount for unsubsidized buyers

      Thank our lobbyist fueled legislature for that

    • Re: (Score:2, Informative)

      really? do people not realize that some of us on Tmobile have been grandfathered into amazingly cheap data plans such as the Tzones $5.99 unlimited data plan?
      unlocked phones in the USA are always expensive. nothing new there.

      lets see...
      $5.99 x 12 = $71.88 / year for full data
      VS
      $39.99 x 12 = $479,88 / year for full data

      sure, i save a few hundred on teh cost of the device via subsidization but in that year i just increased my overall data service charges by $400. and we wonder why america is hurt

    • Re: (Score:2, Informative)

      by LingNoi (1066278)

      Where exactly in Europe are you talking about because it's the complete opposite in the UK where everyone gets a phone with their 1 or 2 year contract. Another person mentioned it is the same in Germany too. This would seem to invalidate your "everything in Europe claim".

      The only place I know where people buy the Phone and then a contract is in my homeland of Thailand.

    • Re:Oh god (Score:5, Insightful)

      by Hurricane78 (562437) <deleted&slashdot,org> on Saturday February 06 2010, @11:55PM (#31050202)

      Speak for yourself.

      In Germany, almost everybody bought subsidized phones until maybe 1-2 years ago. But you always had the option to buy a unsubsidized phone. Which still was unlocked. (I have yet so see a single locked phone or offer in Germany.)

      Luckily, nowadays, the prepaid options available are so great (e.h. blau), that there is no point in buying a subsidized one with a plan, unless you need one of those flat-rate deals where you pay nothing to call others in the same net (usually BASE & re-branded clones of it, or a local dealer like Alice).

      And with even the “candybar” Nokia 5800 costing only than 250€, it’s possible to buy a phone just like that.

      By the way: Wouldn’t you get a N900 for $529? With keyboard, Debian Linux / Maemo, etc?

      • Re:Oh god (Score:4, Interesting)

        by WaywardGeek (1480513) on Sunday February 07 2010, @11:49AM (#31052666)

        By the way: Wouldn’t you get a N900 for $529? With keyboard, Debian Linux / Maemo, etc?

        I would if I didn't mind carrying around a brick in my pocket all day. For that matter, for $529 I can get a decent 15" laptop. As-is, I'm very happy with my unlocked Nexus One. It's the only phone out there that's better than an iPhone, IMO. Of course, if you require a keyboard, the Motorola Droid is the way to go.

      • Re: (Score:3, Funny)

        :O Check your email, we're doing this. I'll call some VC people, you call cell providers and see if we can get a bulk discount. We're going to make millions!

  • Crock (Score:5, Informative)

    by mother_reincarnated (1099781) on Saturday February 06 2010, @10:55PM (#31049884)

    $49 as in "$529 + $1680 is only $2160 +$49."

    That's not quite $49, and not even getting into the issue of NPV (net present value).

    • Re: (Score:3, Insightful)

      $49 as in "$529 + $1680 is only $2160 +$49."

      That's not quite $49, and not even getting into the issue of NPV (net present value).

      If your bank is paying 0.4% apr like mine, NPV is pretty flat these days.

  • by BitZtream (692029) on Saturday February 06 2010, @10:59PM (#31049904)

    Dear poster,

    Your math is unlike my math. I have concluded that your math sounds like something a statistician would produce to justify something completely ass backwards.

    Sincerely,
    John Q Public

  • by MacDork (560499) on Saturday February 06 2010, @11:08PM (#31049942) Journal
    the most interesting: [gadgetopolis.com]

    So, Google/HTC could have very easily made this one phone model compatible with not only T-Mobile and AT&T, but pretty much any 3GSM network worldwide if they only included the right combination of power amplifiers. According to iSuppli’s teardown of the Nexus One, [isuppli.com] the four small power amplifiers that are in the Nexus One only account for $2.20 in manufacturing costs. $2.20! How much more could a different combination of power amplifiers have cost? Maybe another $2 (at most)?!

    It just sounds like a deliberate decision to aid the wireless carrier oligopoly. Given that we’ve seen HTC’s FCC documents to introduce an AT&T oriented version of the Nexus One, you’d think that overall engineering, manufacturing, warehousing, and sales expenses would be lowered enough by offering a single model that could replace two.

    The deliberate lack of network compatibility is simply bewildering.

    What was that about not being evil again?

    • by evanbd (210358) on Saturday February 06 2010, @11:27PM (#31050056)

      In other news, in the real world, adding chips to a design doesn't just cost component + assembly costs. It also increases the size of the device, and possibly the power consumption (though these can probably be put into a low enough power mode that it doesn't matter).

      Making the device larger and heavier isn't something that's done lightly. Sure, this would only add a little bit, but *any* individual feature only adds a little bit. You have to draw a line somewhere.

      That said, I'd like it better if it supported more networks, too...

  • How does this work? (Score:3, Interesting)

    by fermion (181285) on Saturday February 06 2010, @11:09PM (#31049950) Homepage Journal
    To me the math is simple, unless T-Mobile and Android is engaging in false advertising. The price is $179 which seems high for an HTC smart phone. Monthly is about $85. Two year cost is around $2200.

    On the other hand one can buy the phone and the same two year cost will be about the same. This would be the reasonable thing to do as you would not incur the wrath of the Google termination fee.

    I don't even know why anyone would by a Nexus 1, since one can get a no contract phone from T-Mobile for much less and have the same fee.

    I wonder if Google is setting such high prices to keep the cell companies happy, or if they are actually so inefficient that they can't market the phone for less.

  • boo, advertising (Score:2, Interesting)

    by Lazy Jones (8403)
    Google getting desperate [theinquirer.net] and subtly spamming slashdot now? Hey, perhaps people just don't want a phone made by the "maybeyou shouldn't be doing it in the first place" guys?
  • by John Hasler (414242) on Sunday February 07 2010, @12:02AM (#31050228)

    Not possible. T-Mobile is a cellphone company and therefor irredeemably evil. They cannot possibly deserve any credit for anything. I'm sure someone will explain how it is all really a plot to deprive you of your inalienable human right to unlimited free downloads and uncapped infinite bandwidth.

    The RIAA is behind it. Mark my words.

      • Re: (Score:3, Insightful)

        by gad_zuki! (70830)

        If you buy the phone for 529 you do not get on a contract. You simply pay a monthly fee and quit when you want to. There can be no ETF as nothing is subsidized.

  • by GPLHost-Thomas (1330431) on Sunday February 07 2010, @12:59AM (#31050462)
    Aren't you guys tired of reading all the time the same big-brother phone-add "news" on slashdot? Since when this site started covering a 4 months old price as a news? What exactly do we learn here? Are moderators sold to google? Aren't the adds on google itself enough? If this was mobile phone dot com why not, but I (and I believe, the vast majority of readers here) are reading to learn about new stuffs in the IT world.
    I'm getting sick of so much promotion for a device that doesn't deserves it and that is taking so much space and time on the web.
    • Aren't you guys tired of reading all the time the same big-brother phone-ad "news" on slashdot?

      I'm not.

      I'm in fact really happy that there were good discussions about the Nokia N900 phone---otherwise I wouldn't have known about the existence of a smartphone which (supposedly) delivers exactly what I want: a pocket computer I can tinker with.

      Being told that the thing I've been wanting for ten years finally exists is something I'm actually happy about. Was Nokia involved behind the scenes? Were they trying to push their product? Why would I care---I want the product at the price it's offered at.

      Just like the other day where I was shopping for a scarf. The sales clerk notified me they had socks for sale. I tried a pair on, liked it, found the price reasonable, and I needed more socks, so I bought some. Yes, he applied a sales technique on me, and it worked. So what? His pitch didn't artificially inflate my need for socks, it told me "you can get what you want, and here's how: [...]".

      And a while back I was looking for some stickers for my Rubik's cube. One of Google's advertisers had exactly what I wanted, at a price I liked.

      Advertisements aren't that bad. It's just that 99% give all the good ones a bad name ;-)

      That is to say: yeah, I see a lot of ads I'd rather be without. But every once in a while, someone seeks me out wanting to sell me something, and it just so happens that I, before engaging with them, have a desire to buy what I then discover they sell.

      If I like the transaction, why shouldn't I like being brought in contact with the other side of it?

      And hey, if you don't like the headlines, you don't have to read the summary. And if you don't like the summary, you don't have to read the discussion. And you never have to read the article (see, I'm not new here).

  • Not $49, but $2449 (Score:5, Insightful)

    by gnasher719 (869701) on Sunday February 07 2010, @04:53AM (#31051134)
    Shouldn't we calculate the price in the same way as iPhone prices are usually calculated?

    According to the FTA, he is paying $529 for the phone, plus $80 per month for an unlimited plan = $1920 over two years, total = $2449. That is the cost of the phone.
  • by gig (78408) on Sunday February 07 2010, @06:26AM (#31051386)

    This is bullshit. Not only do consumers prefer to pay later, fucking accountants prefer to pay later. Corporations prefer to pay later.

    Apple tried this with the iPhone, too. The original iPhone was unsubsidized. People HATED it.

    The subsidy is great because it makes it possible to buy an iPhone for $99 instead of a crappy feature phone. The extra $20 per month on the contract is offset by the fact that you're using a smartphone, it pays for itself. You make more sales or get a better job or save time or money compared to when you didn't have a smartphone.

    STOP APOLOGIZING FOR ANDROID. It sucks and it won't get better until the people who use it demand that it get better. Google bought Android in 2005. Where are the results? iPad is going to ship with a $15 data plan and Skype calls, that is what was promised from the Google Phone. And iPad with 3G and 16GB is only $50 more than Nexus One.

  • by Jane Q. Public (1010737) on Sunday February 07 2010, @07:52AM (#31051686)

    Now, that $480 savings is $130 more than the $350 savings you get by selecting the $179 subsidized purchase option.

    So, when you think about it, the $20/mo discount to unsubsidized phone buyers is effectively a rebate against the up front cost of the phone.

    Good Grid! Does this guy actually think I am going to try to follow this spaghetti of weird math? "If you think about it, subtracting THIS amount if you get THAT option is almost like you could think of it as though you were saving THIS much beyond the discount with THIS OTHER option..."

    Give me an effin' break!

    Here is a hint for the author of TFA: when comparing costs, you don't need to subract ANYTHING. All you do is add.

    Show me a simple chart:

    Phone A with plan A costs THIS MUCH over two years. (Upfront cost + monthly charge over 2 years = total. No need to get any fancier.)

    Phone B with plan A costs THIS MUCH over two years.

    Phone A with plan B costs THIS MUCH over two years.

    Phone B with plan B costs THIS MUCH over two years.

    And so on. That's all it takes. I don't need to subract anything from anything and I don't need to "think of it as though" I were saving anything. I can just look at the damned chart and see what everything costs.

    Jesus. Is this guy some kind of professional writer? Can I have his job?

  • by okmijnuhb (575581) on Sunday February 07 2010, @08:25AM (#31051804)
    This article is symptomatic of the mobile phone business greed.
    The pricing plans are so convoluted, someone claiming to be an expert cannot even get the math right.
    • by Arker (91948)

      Are they really charging *more* for the same service if you bring your own phone?

      That is utterly insane BS, although about what I would expect from my past dealings with US mobile phone companies. Why in the hell do people put up with that?

    • by SQLGuru (980662) on Saturday February 06 2010, @11:38PM (#31050112)

      I think you've got the plans backwards. Tmobile is discounting the unsubsidized plans $20 (basically, you are making up the subsidy in $20 increments over the life of the contract).

      $179 + $99.99 * 24 = $179 + 2399.76 = $2578.76 Subsidized
      $529 + $79.99 * 24 = $529 + $1919.76 = $2448.76 Unsubsidized

      Difference is $130 in favor of the unsubsidized.

      • Re: (Score:3, Insightful)

        by Dr. Spork (142693)
        Geez, when you add it all up, doesn't it seem like a lot of money to you just for an opportunity to use the phone?
      • Re: (Score:3, Insightful)

        by tangent3 (449222)

        So subsidizing is basically T-mobile giving you a $350 loan where you pay back $20 per month for 24 months.
        If I'm not wrong the interest rate on this loan is 32.4% ?

    • i read a comment over at gizmodo that actually did seem to make sense.

      google's release of the Nexus One is more of a raising the bar for other android hardware makers and in turn they didn't expect to sell tons of units or set the world on fire. rather, they are making other android handset makers step up their game to compete. plus, they can also test their device on a smaller carrier prior to unleashing it into the large boys like verizon and at&t.

      just my .02 like always (cuz you know with the in

      • Re: (Score:3, Insightful)

        by amRadioHed (463061)

        I got one too and I love it. I'm not at all surprised about the low sales so far though, there's been no marketing. I'm guessing they wanted to start slow to work out the kinks and once it hits Verizon they'll probably step up the marketing and it will take off.

    • by rickb928 (945187) on Saturday February 06 2010, @11:52PM (#31050182) Homepage

      The Nexus One (like all Android phones) is data-hungry. It wants a 3G signal to perform well. EDGE sucks so bad you woild give the phone back.

      Since there may not be ANY phone sold in the US that does 3G on both AT&T and T-Mobile, your choice of Android phone pretty much determines which carrier you use - you don't want to buy a Nexus One for use on AT&T, since it will be a slow data phone. Ditto for buying an iPhone 3G or 3GS to use on T-Mobile. It will be slow and disappointing.

      Locking GSM data-intensive phones in the US is pointless, and a complete lie. If you want a 3G phone, your carrier determines which phone you buy. For now, anyways.

      Now, when there is a 3G 'smartphone', Android or not, that can handle both A&T and T-Mobile 3G, then locking becomes important again. But for now, Android GSM phones need not be locked, and smart people at the carriers know this. They just go along as they always have, cause it makes sense to most of us.

      On the CDMA side, it's more interesting.

      In Europe, it seems GSM is pretty compatible. And locking is not a viable business model there.

      So if you buy a locked Android phone, you know at least one party doesn't get it.

      • Re: (Score:3, Insightful)

        by gad_zuki! (70830)

        >Now, when there is a 3G 'smartphone', Android or not, that can handle both A&T and T-Mobile 3G, then locking becomes important again.

        The next version of the Android will support both of them and will support CDMA. I figure by then it'll be on a second hardware revision or at least a second or third radio firmware and be safe to buy.

        >EDGE sucks so bad you woild give the phone back.

        Funny how the first iphone was EDGE only. It sold pretty well. While I wouldnt wish EDGE on my worst enemy, its funny

Complex system: One with real problems and imaginary profits.