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Originally Posted by InvincibleLiving
I follow the logic of what you say except for where you say " These kinds of devices like the TP2 actually cost $600-800." Thats the entire problem right there, there's no reason these devices should ever retail for such an amount! I can now buy 2 PS3's for that same amount lol. And therein lies the problem with the whole celluar system, the costs are grossly over-inflated for the services rendered.
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I can't really agree with you, although I also can't lay out exact the costs involved. But first, you should realize that the retail price of a PS3 is also HEAVILY subsized by Sony. PS3 are sold at a loss, I believe at least at a $200-300 loss, with the intention of gaining that back with game sales (4 game sales easily brings back $200). So the unsubsidized retail price of a PS3 would be closer to $600-700. Here is a sample news item:
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Pricing the PlayStation 3 below its production cost caused Sony to lose $2.16 billion in 2007 and $1.16 billion in 2008, the company revealed today. Sony's fiscal 2008 annual report delineated potential risk factors to its investors, outlining that "the large-scale investment required during the development and introductory period of a new gaming platform may not be fully recovered."
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Also consider that these smartphones like a TP2, are every bit as capable and sophisticated as a modern laptop, but in miniature form, which itself adds to the cost. Hesse has been quoted as confirming these prices and subsidy levels publicly, so the numbers I presented are not fiction.
Lastly, you seem to be conflating the cost of devices with the cost of wireless services. In any case, the bottomline is that Sprint has been losing money bigtime, so it is difficult to argue that they are overcharging in the broad scheme of things...