Does the ability to make calls from a device really add $500 to device costs?
boobdole
Contributor - Level 2

I just found this in passing online and mentioned something about it in another thread but it looks like it deserves its own thread. 

I was looking at the Galaxy 5 mp3 player, which basically looks like every other Android phone (has GPS, bluetooth, good sized camera, Wifi, microphone, speaker, FM radio, etc), except obviously, it's unable to make calls:

http://www.samsung.com/us/mobile/mp3-players/YP-G70CWY/XAA

It's list price is about $200, which, amazingly enough, is about what we pay for phones.  Can you really tell me that the additional circuitry they add to this device to make phone calls adds $500 to the phone?  I really don't think so. 

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Re: Does the ability to make calls from a device really add $500 to device costs?
Sythrix
Contributor - Level 1

In the same way that a new CPU for a computer can cost as much as 3 - 4 times an old one that is still pretty good, that is true for old hardware. The cost to make this device is probably drastically reduced compared to how much it would cost when the hardware was new. That's not to say that phones aren't overpriced, which they are to some extent. Supply and demand really sets the table for pricing.

This device is really neat, but it is certainly not top of the line. The resolution is lower than most new phones, and the processor is a single core 1ghz. So yeah, it's a lot cheaper, and Samsung has found a way to make a little, if not a lot, of money from some old hardware.

One thing I have noticed is that once a carrier sets a price for a phone, they have a hard time reducing it by any significant means, because they want to make that return on the investment, even though it has technically depreciated in value, they know you need a phone . Again, supply and demand.....

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Re: Does the ability to make calls from a device really add $500 to device costs?
AZSALUKI
Legend

boobdole wrote:

It's list price is about $200, which, amazingly enough, is about what we pay for phones.  Can you really tell me that the additional circuitry they add to this device to make phone calls adds $500 to the phone?  I really don't think so. 

no it doesn't cost THAT much more....but that doesn't matter. i'm willing to spend several hundred dollars on a similar device, but that can make a phone call, give me turn by turn gps directions, stream spotify, netflix, the nfl, etc, etc, in my car, and look up the closest coffee shop to me while i'm walking down the street. since the device you linked can't do any of that without a wifi connection, then i would pay about zero dollars for it. i do think they are pretty cool to use instead of an ipod.....but for $200 i would get this!!!!!!!

Re: Does the ability to make calls from a device really add $500 to device costs?
Ann154
Community Leader
Community Leader

Now you're talking, AZ! Nexus 7 has definitely hit the top of the tablet wishlist in my mind.

I'm most definitely NOT a VZW employee. If a post answered your question, please mark it as the answer.

Re: Does the ability to make calls from a device really add $500 to device costs?
Tidbits
Legend

I already pre ordered a 5 of them. One for myself and 4 for family members that I owe Christmas presents too. I didn't want to get them Kindle fires or ipads. I knew these were coming out but was expecting a $300-400 price tag.

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Re: Does the ability to make calls from a device really add $500 to device costs?
Ann154
Community Leader
Community Leader

Let us know how you like them. I am going to wait for a bit to see the reviews and get closer to Christmas.

I'm most definitely NOT a VZW employee. If a post answered your question, please mark it as the answer.

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Re: Does the ability to make calls from a device really add $500 to device costs?
Tidbits
Legend

They are similarly to the Transformer and cheaper priced. I am willing to bet the cheaper price is set by Google to get more people to get on board and use the play store. Similar to how Apple did with the app store and the iPhone 3G with subsidization.

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Re: Does the ability to make calls from a device really add $500 to device costs?
boobdole
Contributor - Level 2

I guess that was kind of my point.  It's entirely supply/demand/capitalism based.  When people talk of the "high cost" of the devices, my point is that it's nowhere NEAR as high as they pretend it to be and the "subsidation" portion of it is pure crap.  It's just greed and extortion. 

Personally, I think paying $300 for a phone is reasonable but $600-700 is just extortion. 

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Re: Does the ability to make calls from a device really add $500 to device costs?
AZSALUKI
Legend

it's only extortion if you are forced to buy it. yes, it's capitalism and supply/demand. would you rather the government step in and tell motorola exactly how much they are allowed to charge? they can only charge what we are willing to pay.

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Re: Does the ability to make calls from a device really add $500 to device costs?
boobdole
Contributor - Level 2

Hmm, good point.  I guess it's just sad that every cell phone manufacturer (who all probably spend about the same on the phone) have all (whether directly or indirectly) colluded to keep the cost well above what the phones actually cost to manufacture.  But I guess that's just capitalism. 

It would be nice to see another company come in with quality products and grossly undercut the prices and take over a significant marketshare but that's probably just wishful thinking.  That said, why everyone hates on Microsoft for being greedy but support Google (when they're clearly just as well established if not more so these days) is beyond me.  Not that I dislike google but I don't see them as "the big friendly helpful company" as much as many others do.  At the end of the day, they're no better . . . actually, this is going a much different direction than the post was intended . . . I'll stop here. 

But yeah, on a sidenote, that Nexus tablet looks amazing for the price!  Oh, and did the Nexus phone significantly drop it's price recently?  Or are list prices only high when you try and buy from a carrier like Verizon directly?  I could have sworn Verizon and those company claim the list price was $600-700 but looking at that site, it looks like it's about $450.  That's actually pretty reasonable (considering the charge, with subsidy, was $300 for me.  For only $150 more, I'd pay full retail for the phone (well, not THIS phone.  But another phone that has significantly better features . . . ). 

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