That kind of market calculus made sense before the recession. Now the value proposition has changed, and while people may still buy newer hardware (such as tablets) they expect better value from their tech purchasing because increasing wealth is no longer a given.
I'm not so sure about that. You can (probably- I'll be honest, I haven't checked for sure) get a more powerful Android handset than a Nexus One for free if you sign a new two-year agreement right now. There's very little to lose there- except having to take on a two year plan. Except...
Also, people are more suspicious of corporations in general, especially ones that are sitting on a large cash pile. Public sentiment is fickle and can quickly bite a company in the ass - look at how far the stars of Groupon and Netflix have fallen in just two quarters.
I'm extremely skeptical of the former claim- people's anger is directed towards banks, not large corporations with hordes of cash (by and large). If they were, people would hate Apple.
Groupon and Netflix are both things that you can quite conceivably do without. A cellphone these days is seen as an essential, so signing up for a new two year term isn't such a friction point. You're going to need cellphone service from somewhere, after all.
A 2-year contract costs $20/month more than a comparable month-to-month plan. (T-mobile's Even More /Plus plans make this explicit.) That's where the phone subsidy comes from.
There's very little to lose there- except having to take on a two year plan.
Creditworthiness is a major barrier for many people. Many more resent being tied to a single vendor. Hence the increasing market share of non-contract vendors, although they've been taking a beating too because cell service demand at the bottom end is highly elastic compared to food and housing.
If you're an existing customer of a cell phone provider without a contract, I kind of doubt they'll refuse to sign you up to a new two-year contract because of credit quality, as long as you've been paying your bils. It doesn't make sense to drive you to jump to another carrier.
I'm not so sure about that. You can (probably- I'll be honest, I haven't checked for sure) get a more powerful Android handset than a Nexus One for free if you sign a new two-year agreement right now. There's very little to lose there- except having to take on a two year plan. Except...
Also, people are more suspicious of corporations in general, especially ones that are sitting on a large cash pile. Public sentiment is fickle and can quickly bite a company in the ass - look at how far the stars of Groupon and Netflix have fallen in just two quarters.
I'm extremely skeptical of the former claim- people's anger is directed towards banks, not large corporations with hordes of cash (by and large). If they were, people would hate Apple.
Groupon and Netflix are both things that you can quite conceivably do without. A cellphone these days is seen as an essential, so signing up for a new two year term isn't such a friction point. You're going to need cellphone service from somewhere, after all.