So I walked into the Verizon store over the weekend to get the DROID, only to find that I misread my phone upgrade eligibility date by a year (11/2010). So, I walked out as I sure as h*ll wasn't going to drop $550 for a phone... but then I began thinking about the situation and ultimately came to this conclusion: Verizon doesn't want my money.
Sure, I have another year on my contract, so they'll get my money fo another year, but why did they just turn me down to extend my contract, plus pay an additional $30/mo data plan I'm not paying for now? I cannot think of any business that would turn down such an offer by a customer. I mean, I essentially walked in and had the following conversation:
Me: "Hi, I'd like to pay you guys more money per month and lock it in for a longer period of time, how's that sound?"
Verizon: "No-can-do. Come back in 2010 and maybe we'll want more of your money by then. For now, however, you're locked in paying us a smaller amount of money for a shorter period of time."
Makes me wonder.. if I just walked in without the intention of getting a DROID and asked to extend my contract, would they let me (this would make me laugh, if the answer is honestly "no")? Is anyone out there capable of explaining why there's a restriction on extending your contract (through the means of acquiring a new phone)? The only reason I can think of is to dissuade customers from selling their discounted models for full retail if they upgrade at a quick pace, but there are certainly other methods for that.
Oh I have you beat by a long shot. My primary line is available for upgrade now. My secondary share line is available on 1/7/10. Would Verizon move up my second line's upgrade to now so I can buy TWO data plans and phones? No. They did move the second line up one month though. I've been trying to get them to allow me to early upgrade for months. Baffling to me that Verizon would turn down an additional $60/month.
Sure, I wasn't tryng to argue that paying the DROID retail for some isn't an alternative, more that it just seems like poor decisions for Verizon. That is, unless I'm missing something?
I mean, we could all do that math. For simplicity we'll say there's a full 12 months left on the current contract at $35/mo for the plan (as part of a Family Plan), and we'll exclude any taxes, fee's etc.
The rest of the contract would be: $35/mo x 12 months = $420
And the upgrade and conract extension: $200 DROID + (($35/mo phone + $30/mo data) * 24) = $1760
So, that's a loss of a sure-thing $1340 (or, $1140 if you figure Verizon isn't making anything off the DROID sale) of my money over the next two years. What kind of business turns that down? Even if I purchase the DROID at retail now and finish the contract-year it still doesn't come out as the best route for Verizon, given the three choices.
I mean, if Verizon did allow customers to upgrade phones at their will by extending their contract it's win-win. The customer would get the phone without fronting, in the DROID's case, an additional $400 upfront cost, and Verizon locks in your money for a longer period of time--and even more money if your adding services like the data plan. Just seems... fuzzy.
Having been with Sprint and AT&T before coming to Verizon, I can say from first hand experience that niether one of them will allow you to upgrade at the reduced price before it is time. With Sprint it used to be every 18 months and then they changed to every 22 months, like Verizon does now. AT&T is similar.
It's all about the big mighty $. That's why they are as big as they are. They put a hot phone out on the market and offer discounts only to eligible up graders and "NEW" customers. They don't give existing customers a chance to extend their contract with any discount whatsoever. C'mon.... give the existing customers something. You know why? Because they know people can't wait. People see the advertisements for this thing and they just have to have it. Instant gratification. But it's a freakin' phone. But it's not as ridiculous as when the iphone came out. All I can say is that Verizon should at least meet the shortcomer's half way with some type of discount. But they have most people by the jewels. Knowing their vulnerability. Knowing they will dish out the cash. All the wireless companies are the same. They nickel and dime you to death.
I can beat this. When I signed up for Verizon, I paid more to get a 1 year contract. That was 26 months ago. For the past 14 months I have been paying month to month. This morning I walked into a Verizon store and qualified for the $199.99 price, but not the $149.99 current eligible customer price. I asked the sales representative why I did not qualify. They did not know, nor could they provide me with an answer other than... "c'mon it's only a difference of $50."
I then called *611 and inquired. This is what I was told. Because I did not originally sign up for a 2 year contract, I was not eligible for an additional $50 rebate. This was my argument.
I am now month to month and can leave at any moment, transfer my phone number and qualify for every holiday promotion from a rival carrier. Also, more than a dozen androids will be out across all major carriers by the end of the year. Looking at the IRR for them taking a $50 hit today and signing me into a 24 month contract at an additional $720 for the duration of the contract:
So, for their investment of $50, they will get $30/month at 0.75% interest with N = 24. This means the NPV would be more than $600 with an IRR of nearly 60%. This of course assumes there is 0 overhead for COGS.
Stupid. I can't wait to see what Dell and Sony produce for T-mobile. Bye, bye Verizon.