I found a few articles that talk about the actual costs of phones.
Lumia 900/Samsung SII - http://www.isuppli.com/Teardowns/News/Pages/Nokia-900-Carries-Bill-of-Materials-of-$209.aspx
I assume it's pretty reasonable to assume that parts for most phones cost about this much. I just read people talk about how much it costs to build these phones, etc. It doesn't cost anywhere near as much as everyone seems to believe they do. The markup is ridiculous (and it's also safe to assume that carriers like AT&T, Verizon, Spring, etc) get prices less than this.
The idea that we're getting a "deal" on a phone for a "subsidized cost" of $200-300 is flat out a lie. Realistically, the costs we're paying are probably pretty near what the carriers are paying and our bills are jacked up pretty high to pay for the "subsidy costs" of the phones.
I just figured I'd share this information with anyone that might be interested in how badly we're all being ripped off. It might be time to start looking at "bring your own device" plans. I know of one I'd literally save $100/month by switching to. Somehow, I doubt they're subsidizing my phone price by $100 per month. Coverage might not be as good but is Verizon's $100/month better? I doubt it.
Just food for thought, peeps.
they don't price them based on cost though. prices are driven by demand. we are willing to pay more for the convenience of having these things in our pocket. i agree though, that it would be nice to have a system where we just bought them and then activated it on a carrier.....like in most of eastern europe. i guarantee prices would drop if we had to pay full retail.
If only there were no other costs than those of the raw materials...
Work/sales force, Marketing/Advertising, Cost of infrastructure, etc...
I once did a study on the cost(raw materials) it takes to make a cup of Diet Coke. Result - about $0.05-$0.10 for a 20 oz cup, currently being sold at 20x to 40x markup.
Bottom line is there are other factors/costs than those of the raw material which go into determining the price.
More food for thought...
Try to contact the manufacturer and see what they are willing to cut you a deal on..
Research and development, patents, testing.. a lot goes into the cost of a phone
But then again you don't think those $150 true religion jeans are more than $15 do you?
news, an item is still worth what people will pay for it
it is much cheaper in Europe, but a lot less of a burden on the carriers to support basic garbage calls
america wants their hand held through everything so i doubt it will ever happen here
One other problem with those reports it doesn't compensate for sales. They mark up based to meet initial investments. If they spent 10M in developmental costs then production costs(which yields what those reports shows per device), and then you include shipping and advertisement. If those sold at a small markup then they would have to sell an astronomical amount to break even. 100,000 at 200 = 20,000,000. That's why when devices sell a lot the price drops steeply as they turned enough profit for their next project while keeping overhead. Without doing this a bad device will put you in a whole you may not recover from if it happens more than enough(Like Motorola Mobility).
Contracts are a bad idea to begin with since the average consumer has no idea what it's about anyway. All they really see is that new phone at the end of 2 years. Chances are if you told someone you paid full retail, they would flip out and ask why was your price so high.