I was reading the Ottawa Citizen business and technology section and the mention of a particular mobile phone and how it was priced really irked me.
The write-up mentioned the Samsung Galaxy Spica (terrible brand name) at Rogers for $85 with a three year contract that carries a minimum monthly charge of $45. You can see what I was reading here.
I get why phones are offered on a discount with a contract (so the service provider can make back the difference) but my issue with advertising phones in this manner is that it continues the practice of getting Canadians hooked on what appears to be cheap hardware.
There are few places left where consumers have been trained to buy phones at discounts. In most other places, customers purchase the phone at full price and then shop around for the best deal in terms of network service. A good smartphone (and I hate the term smartphone) costs upwards of $500 dollars if it is unlocked.
I did a bit of digging and found out that in the US, only about 5% of phones are sold unlocked. Worldwide it is about 50% but as high as 80% in Asia and 70% in Europe. If it is 5% in the US, I would imagine it is about the same if not less in Canada.
I think the problem in Canada comes from the fact that when it comes to mobile phones, we are like the citizens of that fateful nation North Korea. In North Korea, Kim Jong Il has them so brainwashed, they believe they live in the best place on earth. No, really.
It would then appear that in Canada and US, we have also been lead astray because we have no concept of the true cost of a mobile phone. We just take what we read as being true.
How can the media get away without reporting the true cost of the hardware and why do they have to quote it at the 3 year contract discounted rate? I believe the answer to that is quite simple. The network operators strike exclusive deals with hardware manufacturers for phone exclusivity. Because Rogers is the only one offering that phone, you have to get it through Rogers and are then able to quote "their" price with a contract.
Once Canadians get locked into their service provide, it's over. The network operator can provide you with poor customer service (that we complain about) and you have no choice but to stay with them or pay a penalty for leaving your contract. I just hope more Canadians decide to stop taking these types of practices sitting down and instead give the operators feedback with their feet.... by walking somewhere else and getting better service or by purchasing unlocked phones. I was glad to hear about Google's plans with the Nexus One to offer it unlocked and I hope that it begins a trend here in North America. Let's hope for all of our sakes it does!