The largest issue I face as an Android user is the discussion I find myself in sometimes, especially when talking to feature phone users who claim that their Nokia is worth all those 100 dollars they paid for it, yet my Android is most definitely over 500 dollars. I say that it’s actually a touch more if you buy it without a subscription, yet a lot of carriers are offering killer deals for said devices. Just thinking that I got 700 MB of internet traffic a month, a few hundred minutes to talk, a few hundred messages with around 15 euros a month and I got my Android smartphone for 100 euros with the subscription.

This is a major issue considering that there is still a lot of potential for the community to grow, but the only thing stopping it is really the fact that one can’t get an Android phone for less than 200-300 dollars without a subscription. In a way that stopped a lot of feature phone users to join our little club. As such T-Mobile USA announced that it’s working on dropping their prices for the smartphone sector. Chief Executive Philipp Humm announced that the large majority of the devices found on carrier will be Google Android powered smartphones which will cost less than 100 dollar per unit. This is quite the move T-Mobile is planning on making considering that most Android smartphones available in the US are in the 200-300 dollar area. One of the first steps in this direction was made in October when a limited data plan was launched which costs only 10 dollars in order to reduce the monthly bills for this kind of services.

When taking a look at the competition T-Mobile has to fight in the US, with Verizon and AT&T which are sharing the largest user base with their high end devices, it’s only natural that T-Mobile wishes to move to the lower end in order to increase their user base. Mr. Philipp Humm continued saying that “We are working with our vendors on this one to drive the price of smartphones down” as not every new user is going to need a premier or high end device to fulfill their needs. Also thanks to Google and their Android platform manufacturers managed to bring prices down as the operating system itself is free. The main goal is to make manufacturers to lower their prices as at the time being the carrier is subsidizing the prices heavily. As such Apple said in October of last year that although the retail price of its most expensive iPhone is around the 300 dollar mark, they received 610 dollars per device in the 3^rd quarter, mainly because the carrier is paying for most of it.

While the holidays were knocking on the door Verizon pulled out a smaller data plan with 15 dollars for 150 MB a month, this coming more as a follow up to the change AT&T made during the summer in their pricing plans offering 200 MB for 15 dollars a month. T-Mobile went even lower than that offering 200 MB for only 10 dollars a month.

Looking at the whole picture, although T-Mobile registered a growth in profits for the last year, they claimed it was mainly because of their prepaid offers as they were losing customers who had subscriptions at the carrier mainly because of the lack of the iPhone. For the time being there are no plans to introduce the iPhone for T-Mobile USA but let’s wait and see what they will be doing next. Until the following time, I’ll be busy checking pricing for a Galaxy S without a subscription and getting a pre paid at T-Mobile, who knows, I might just save some money in the long run.1

January 14th, 2011 Catalin Mengheris