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Cell Phones : To Subsidize or Not : To Unlock or Not



What is the real cost of that cell phone in your pocket?

Are the days of free or low priced devices ready to end?

It would appear to be the case based on recent industry news.

This quote from Reuters suggests that it is just a matter of time before we will be paying real prices for our devices.

Subsidies have been a major driver of the iPhone’s success
and in boosting Apple’s earnings. Analysts estimate operators
pay a roughly $400 subsidy for each iPhone they sell in
comparison with subsidies of $250 to $300 for other smartphones.
But that may already be changing. T-Mobile USA, a unit of
Deutsche Telekom AG, has not disclosed the details of
its deal with Apple, but CEO John Legere said it will not be as
onerous as Sprint Nextel’s commitment to pay $15.5 billion over
four years. Instead of subsidizing smartphones, T-Mobile USA
will let consumers pay the full price in monthly installments.
Randall Stephenson, CEO of AT&T, Apple’s first partner for
the iPhone, applauds T-Mobile USA’s idea.
“That’s something we’ve looked at on several occasions. I
kind of like that idea,” Stephenson said. “Its something we’re
going to be watching.”
Verizon CEO Lowell McAdam told Reuters T-Mobile USA’s
strategy is “very intriguing,” but wondered if consumers are
ready to pay full price. An iPhone 5 with 16 gigabytes of
storage that is not tied to a contract costs $649 on
If subsidies are removed and payment plans widely adopted,
some experts say consumers might opt for cheaper devices.

This could have many implications including the potential to shrink the sales and margins on premium and previous model devices. We have also ask if the standard will evolve into unlocked devices after they are paid off and/or  bought out right  payment plan.

Another article on BGR  notes, Canada’s industry regulators want to not only limit the early termination fees that wireless carriers can charge, but to also mandate that carriers unlock their smartphones under “reasonable terms.”

If we consider the current business model for most cell phone service providers, we have to understand that most of the subsidies are to bolster the use of extended contracts and customer commitments to extended service periods.  Recent US rules that went into effect on Saturday previous, provide carriers the absolute right to lock devices to their service and makes it illegal for the owner of the phone to unlock without permission of the carriers.

It will be interesting to follow this as it progresses to see if we start seeing universal devices and more month to month service plans.

Caribbean Nation Gets an International Go-Ahead to Break U.S. Copyright Laws

Map of Antigua showing the parishes

Map of Antigua showing the parishes

“The United States has urged Antigua to consider solutions that would benefit its broader economy. However, Antigua has repeatedly stymied these negotiations with certain unrealistic demands,” Nkenge Harmon, a spokeswoman for the US Trade Representative’s office, said.

The strong statement came after Antigua said it would suspend US copyrights and patents, an unusual form of retaliation, unless the United States took its demands for compensation more seriously in a ruling Antigua won at the World Trade Organization.

“The economy of Antigua and Barbuda has been devastated by the United States government’s long campaign to prevent American consumers from gambling on-line with offshore gaming operators,” Antigua’s Finance Minister Harold Lovell said in a statement.

“We once again ask … the United States of America to act in accordance with the WTO’s decisions in this matter.”

Antigua, a former British colony with few natural resources, has knocked heads with the United States since the late 1990s, when it began building an Internet gambling industry to replace jobs in its declining tourist industry.

The gambling sector at its height employed more than 4000 people and was worth more than US$3.4 billion to the country’s economy, but it has shrunk to less than 500 people because of US restrictions, the Antiguan government says.

The United States said it never intended as part of its WTO commitments to allow foreign companies to offer online gambling services. In 2007, it began a formal WTO procedure to withdraw the gambling concession and reached a compensation package with all WTO members, except Antigua.

Antigua argued in a case first brought to the WTO in 2003 that US laws barring the placing of bets across states lines by electronic means violated global trade rules.

It won a partial victory in 2005 when the WTO ruled a US law allowing only domestic companies to provide online horse-race gambling services discriminated against foreign companies.

When the United States failed to change the law, the WTO in 2007 gave Antigua the right to retaliate by waiving intellectual property rights protections on some US$21 million worth of US goods annually, which was far less than the US$3.44 billion the island country requested.

Typically, the WTO authorizes countries to retaliate by raising tariffs, but in Antigua’s case it decided the country was too small for that to be an effective tool to persuade the United States to change its law.

Harmon said Antigua would be unwise to proceed with the plan “to authorize the theft of intellectual property.”

“Government-authorized piracy would undermine chances for a settlement. It also would serve as a major impediment to foreign investment in the Antiguan economy, particularly in high-tech industries,” he said.

But Antiguan officials said the United States had “more or less ignored” all of their proposals for resolving the spat.

– Reuters

Native name: Wadadli
Location Caribbean Sea
Coordinates 17°5′N 61°48′WCoordinates: 17°5′N 61°48′W
Archipelago Leeward Islands
Area 281 km2 (108.5 sq mi)
Coastline 87 km (54.1 mi)
Highest elevation 402 m (1,319 ft)
Highest point Mount Obama / Boggy Peak
Antigua and Barbuda
Largest city St. John’s (pop. 31,000)
Population 80,161 (as of 2011 Census)
Density 285.2 /km2 (738.7 /sq mi)
Ethnic groups 91% Black or Mulatto, 4.4% Other Mixed Race, 1.7% White, 2.9% Other


Just Me Welcome to my little corner of the internet…

My name on the internet is birdpuk and I am also known as Doug Knowles by many.  I was born and raised in the San Francisco Bay Area and am currently living in Eastern Contra Costa County. I graduated from Ygnacio Valley High School in 1977.  My Careers, have included the Meat Industry and the Computer Industry. I have also Owned a Bird Store and breed Exotic Birds, mainly Parrots and Cockatoos. I am currently single and have a teenage Boy and Girl.  I am between jobs at this time, but always looking for a new adventure.  I, like most people, have a personal perspective on Life and many other issues and passions. I like to think out loud and it sometimes gets me into a pickle. That is where this Blog will come in… Hopefully it will be my friend and keep me out of the pickles. But if all else fails I can allways edit or delete my troublesome rambling

As you can tell from the pictures here as well as my internet handle, I love my Birds very much.  I currently share

Hanging with my bud.

my home with 4 Macaws (Lucy, Cali, Ruby and Peaches), 2 African Grey Parrots (Deja and Paradox) , 2 Rose Breasted Cockatoos (Ausi and Crow) and my very own bottle opener (Jerry ) the Greater Sulfur Crested Cockatoo.

Birds may rule the roost but they also share it with Coda(rottie/lab), Ginger (sheltie), Pepper (tiny black mix), Salt (Fox Terrier) and Cinibon (Orange Tabby).  As you can see I can never claim to be living by self in this house..

I am a die hard San Francisco Giants fan and like the Forty Niners Just about as much as is possible for a Baseball fan. I wish football  would wait until Baseball ends and then I could be die hard both.

Politically, I have found, that I can no-longer call myself a Democrat nor a Republican, but definitely lean to the conservative side of most issues today. I am a Union Member and support organized labor in many industries and that is probably a good topic category for discussion on the site at a later time.  I have been both the Company and the Worker, so I feel I have a unique perspective on that subject.  Particularly after going on strike recently as a Raleys Meat Cutter.

I am a Application Developer both professionaly and in my spare time. I have served the community as a Police Commission Member and Neighborhood  Watch Coordinator.

I am not a teacher but I love to teach!  I believe the best way to learn more is to share what you learned and to ask the right questions.  I mentioned earlier that I think  out loud and as such you will often, perhaps, think I am making a statement, when in reality, I am probably asking a question.  Opinions are formed and most people stop considering what they are after they are formed. this I what I call a closed mind.  If you have an Opinion you should be willing to discuss it and consider the arguments for both sides or maybe it’s just better left to your self and not shared.

Thanks for coming by and I hope you find interesting things while you are here and please feel free to share your comments and ask questions.  I only ask that you be polite and treat others with the same respect that you would in a discussion with your children. After all an Adult is only a child with experience under their belt.

Doug Knowles

aka birdpuk

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