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Why US Carriers Sell Smartphones for $199?

Torch 9800 199 It changed slowly but it looks like the $199 starting price point for smartphones is here to stay. Time Inc pointed out an interesting article on CNNMoney that tries to explain why all smartphones start selling at $199. It is slightly odd that no matter what the device they always seem to sell for $199 be it a BlackBerry, iPhone, or Android device. Don’t get me wrong carriers and resellers discount most of them to free over time but carriers seem to be stuck on the $199 price point.

It makes me wonder what the magic is of $199. Booz & Co consulting firm partner George Appling claims that “The obvious answer is that $199 is a magic price point for smartphone volume.” That could definitely be but I think it is just because carriers have managed to condition us that a new device will cost $199 with a new contract. Curve devices have usually gotten a $50 discount to $149 but carriers do not seem eager to change it up based on how much the device costs them…

What do you think?

3 total comments on this postSubmit your comment!
  1. Why $199? Cuz that’s the highest they can sell and be able market you with “$100 off” and a final price to you before taxes of “under $100”.

  2. My first smartphone was the BB 8320 and I paid $299 ($598 for a pair). I’m much happier that the price point for smartphones has come down to $199.

  3. I disagree with this post, actually I have my thoughts on this too, I just put up a response post on G Style Magazine, check it out (I listed you guys as a source of course)

    I believe these reason for the $199 price point began with the iPhone 3G. Check my thoughts :o)

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