Is Apple’s iPhone About To Be Crushed By Google?
The new Moto g smartphone from Google’s subsidiary Motorala, has been touted as the smartphone that will see Google’s Android finally crush Apple’s iPhone. The phone sports a 4.5-inch, 720p display, a Snapdragon 400 processor and sells for $179 off contract
Unlocked Android handsets would erode Apple’s pricing power
No doubt, Apple’s iPhone has benefited from carrier subsidies — they work as a great equalizer, making consumers far less sensitive to price differences. And as long as consumers rely on carrier subsidies to buy their handsets, Apple should be at a great advantage — its competitors can’t undermine it with lower pricing.
But Google could. The trend toward cheap yet powerful unlocked Nexus phones could result in the signing of fewer two-year contracts, particularly if Google continues to emphasize the handset in the coming quarters and can get future Nexus phones to work with more networks (notably Verizon’s). T-Mobile’s recent growth suggests that consumers are eager to ditch the standard two-year contract.
If Google is effective in undermining consumers’ dependence on carrier subsidies, Apple shareholders should be very concerned.
But here the thing – most carriers place an awful lot of limitations on SIM only deals for unlock phone. Here are deals from AT&T and T-Moblie (US) and 3 Network (UK). To get a decent quota of minutes, texts and data, you’re better off going with a contract plan. Additionally, I can only see the prices of these SIM only deals getting higher.
Sam Mattera also suggests that Google is circumventing the carriers and believes that this is exactly what the carriers want.
“If given the choice, most wireless subscribers would probably prefer not to sign a two-year agreement, and instead go month-to-month,” Sam Mattera writes for Motley Fool. “On Verizon Wireless, for example, a month-to-month plan with 2GB of data is just $60 — the equivalent plan on contract is $100, and getting out of it requires paying early termination fees.”
In my opinion, the deal above is only to stop consumers from jumping ship. Why would a carrier not want a consumer on a two year contract paying a monthly fee whether they like it or not.