Google's Nexus One, a Steal At $49 Unlocked?

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."

Crock

[mother_reincarnated]

$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:Oh god

[santax]

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

[maxume]

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

Feature phones

[tepples]

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:Oh god

[Anonymous Coward]

You're right, mobile phones are locked by default in most of Europe: at least in Benelux, Germany, Poland, the Czech republic, Slovakia, Austria, Italy, Slovenia, Hungary, Croatia, Bosnia and Herzegovina and Serbia.

sopssa is probably located in Scandinavia and is talking out of his ass making assumptions about phones being unlocked in Europe by default. Check your facts before posting sopssa.

sopssa backwards = ass P.o.S., how true.

Re:Oh god

[seamonkey420]

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 hurting financially. its about the long term of things and not being locked into a contract. i'll pay that $530 up front and keep my amazing plan. just my .02 on that.

Re:Oh god

[LingNoi]

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:Ooops

[Anonymous Coward]

Whoops indeed... thanks for pointing out my non-preview stupidity. So (1) is $2578.76 and (2) is $2448.76.

The bottom line should read

"to arrive at his number you are buying the unsubsidized phone, paying the unsubsidized running costs, and on top of that somehow receiving the money for the subsidized running costs!"

Re:Obviously this person is not financially litera

[SQLGuru]

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:I found the 'defective by design' aspect

[marcmerlin]

since you're not a radio and hardware engineer, I guess it's not obvious to you that putting antennas and electronics for different frequencies does cost board space. It's not impossible but it's hard on a small phone and definitely more money.
Yes, I'd also love a phone that does it all, but they aren't exactly common. It's not just HTC, it's pretty much everyone.

That's not a choice...

[rickb928]

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:Oh god

[Anonymous Coward]

BS, I am using Vodafone pre-paid cards on an unlocked phone without a contract in Germany...

Re:Oh god

[TBoon]

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:Oh god

[Dahan]

Prepay doesn't have data.

AT&T GoPhone. A ludicrous $0.01/KB if you don't buy a block of data, but you can buy a 100MB block that lasts up to 30 days for $19.99 (and if you buy another block of data before the 30 days is up, any unused amount from your previous block will roll over), as well as a 1MB block for $4.99. I use it with my unlocked Nokia E71, and it works great. While 100MB isn't much, I don't use my phone's data connection as if it were my primary internet connection; 100MB typically lasts me 2 or 3 months.

Re:Oh god

[obarthelemy]

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

[Anonymous Coward]

a 100MB block that lasts up to 30 days for $19.99 ... 100MB typically lasts me 2 or 3 months

Inconsistent data.

Re:Oh god

[Anonymous Coward]

"Why don't you just buy a prepay one?"

Prepay doesn't have data.

In the UK Three gives 150MB every time you top up £5 credit lasts 90 days, credit never expires. If you are a heavier user each 1GB of data costs £5, expires 1 month from day of purchase. £15 allows you 3GB tethering

So paying now is an advantage over paying later?

[gig]

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.

Europe has choice of model

[iampiti]

As other european guys have said things here over Europe work a little differently. In Spain al least things are more or like like this:

• You can "buy" subsidized phones from the cellphone companies at very small prices but, of course, they are locked to the carrier (neverthless they can be unlocked at many places cheaply) and you have pretty high rates. This is similar to the situation a the US.
• You can buy the phones completely unlocked. You do have to pay the phone full price upfront but:
  • Since there's one standard that is used everywhere in Europe you can use your phone with every company just swap the SIM card.
  • Many carriers offer cheaper prices if you bring your own phone.

So you really have a choice.

Total Cost of Ownership

[Anonymous Coward]

Thankfully sensible people *do* exist.

Nexus One vs iPhone, Droid & Palm Pre [billshrink.com]

Re:Oh god

[wfeick]

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:Oh god

[wfeick]

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

Re:Not $49, but $2449

[nchurch]

The unlimited plan is $60/month for the unlocked/no-contract plan with T-Mobile, which you can only get if you buy an unlocked phone ($529). If you buy the subsidized version, the unlimited plan is $80/month.