StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between



How Verizon And AT&T Stopped Me From Buying A New Phone

17 Jan 2010
Posted by Stan Collender

I'm interrupting our usual discussions on mostly macro issues to tell a very personal and extremely frustrating micro story about how I ended up not buying something I had planned to buy.

First, you need to know that one of my basic rules in life is that, while I'm more than willing to work hard to earn my money, I don't think I should have to work hard to spend it.

Second, you also need to know that my existing contract with Verizon Wireless, a company with which I long have had a love/hate relationship, expired about 10 days ago.  I am now free to switch companies without paying a penalty, to get a new phone, and to get a $50 discount from Verizon off a new phone if I re-up up for 2 years. 

In theory, I'm the consumer with all the power.  I've got excellent credit, I like electronic gadgets, and I'm a free agent.  In other words, I'm the customer every phone company should want and be trying hard to get.

Except it turns out that's not the case.

Ever since my beautiful and talented wife (The BTW) got one, I have lusted after an iPhone.  Even though I really only use my current cell phone for...well...making phone calls, like many others I have been seduced by everything an iPhone can do.  The Apple commercials that emphasize the apps over the phone apparently have had an impact on my thinking.  Although I really only use my iPod when I'm working out, having all my music with me at all times seems like a great idea.  And being able to show my extensive collection of personal pictures to everyone I meet, take new photos, surf the web, and look up movie start times whenever I want seems like a dream come true.

Except The BTW tells me the one app I really use and need -- the phone -- is the worst thing about the iPhone.

But I decided to find out for myself.  So I went to an AT&T store a few blocks from my office (and which is conveniently a few doors down from a Verizon store so I could easily visit both if necessary) and the salesman flat out refused to answer any questions about the quality of the iPhone service.   He said he was from California and not that familiar with the service on the east coast.  He never had a problem with the service in the Golden State and, by the way, did I know how easy it was to watch a movie on the iPhone?

I asked for a manager.  I was told none was available.

The "salesman" then talked proudly about how the iPhone has 36 gigs of memory.  He went pale, however, when I mentioned that I had an 160 gig iPod Classic and 36 gigs wouldn't come close to handling what it stored.  He then said I could always keep my existing iPod and just use my new iPhone for everything else.

So, he wouldn't answer my questions about the phone service and one of the non-calling features he was flacking wasn't going to work for me.  And, to be honest, as seductive as having an app for everything I could possibly imagine (Is there an app for helping you decide what phone to buy?) might have been, I decided that spending $200 or more for an iPhone wasn't happening.

So I went a few doors down to the Verizon store, gave then my cell phone number, and waited for them to court a customer whose contract was up and could bolt at any minute.

Wrong.

As soon as they heard that, while 1 year was possible, I wasn't going to sign up for another 2 years because I wanted the freedom to move my account if they screwed something up, they became incredibly uninterested in me and my monthly payments.  They couldn't explain why a Droid was a better deal than an iPhone, or just a good deal at all.  And they really lost interest when I said I just wanted to get a new basic phone to replace my now 5-year old Motorola Razr.

The only new phone I wanted was out of stock.  But the listed $9.95 price was only good in any case if I renewed my contract for two years; otherwise it was $449, which clearly was a rip-off for a phone that looked like it cost about $3 to manufacture.  The "salesman" said it was $9.95 (if it had been in stock, of course) only because I would have paid for the remaining $440 over the 24 months of the 2-year contract he so desperately wanted me to sign.

(That begs an interesting question about my existing phone and contract: Since my existing phone was paid for over the past 24 months, why doesn't my current Verizon bill fall by the monthly amount that was priced in to my payment 2 years ago?  Isn't that a rip-off as well?)

So this is why I didn't spend the money I had planned to spend this weekend.  It's also why, if you call me on my cell, I won't be able to look up a movie start time while we're talking.

I now return you to our regular mostly macro issue programming. 

The Financial Government Complex

This is another anecdote reflecting the illusion of free markets created by selective deregulation and partial application of anti-trust laws. Under the guise of the free market, the Bushes in particular conducted crony capitalism, ensuring that the powerful profited while everyone else runs faster on the hamster wheel.

There are reasons why there must be a limited number of (regulated) phone companies, but we could have many service providers. Look at the internet.


The phone you should own

Stan,

I don't know what kind of store experience you are likely to have, but I do know that I can wholeheartedly recommend an alternative to the Droid and the Iphone that is well worth considering and thats the Palm Pre (which incidentally is coming to Verizon Jan. 25). Its not the device for you if you want someplace to store your entire Ipod collection, though with its USB drive you can store anything on it you want with ease. While the Iphone boasts over 100,000 apps, at least 50% are low quality. The Pre's app eco system is evolving very fast and the Pre operating system is being upgraded on a regular basis. Its has a wonderful interface, its easy to use and it will be a better phone in 12 months than it is the day you got it. Give it a look.


ebay can be your friend...

If you do decide to settle for ye olde basic phone, one of your two best bets is ebay. Find an unlocked or Verizon phone, buy it cheap, take it to Verizon and have your number switched, and keep your month-to-month contract.

Your other best option can be cheaper still - find a buddy who is switching from a Verizon basic phone to a smart phone, and buy them lunch or dinner for it.

Good luck with whatever you do!


Phone

I recall you had a similar experience when you went car shopping----Poor product knowledge and a lousy attitude.

I, too, have thought about shopping for an iphone, or some other smartphone, but cringe at the anticipated experience---just like I cringe at car shopping.

So I make do with an old Blackberry with a tolerable phone, and remind myself that since many of our friends have smartphones, it's pretty easy to free-ride the applications.

In your case, it's the BTW.


pay-as-you-go

uglyeric.com - activate any old verizon phone on pageplus, which is a pay as you go reseller on the verizon network. Basically Verizon coverage without all the b.s.


You made me laugh

I solved the problem by keeping my cheapo cell phone and buying an iPod Touch. The iPod Touch does pretty much everything the iPhone does except make phone calls. It stores my music, photos, videos, and I can surf the web and check email on it (email syncs with my other computers because I have Apple's Mobileme service).

I love the Kindle app (I've sampled and read books on there, including Bruce's book -- this is great to use when I'm on a train, plane or in coffee shop), and also the flight tracker, which I use often to check status of flights for myself and family members who are traveling. I also have the public radio app, so I can listen to any public radio station, including my hometown guys, no matter where I am.

Apple is, hands down, the most innovative company on the planet.


Could be worse...if Verizon

Could be worse...if Verizon blocked your voice whenever you said something with which they disagreed.


You should buy iPhones at an

You should buy iPhones at an Apple store. They are more of a computer than a phone. Or if you know what you want, just buy online from Apple. My 3GS was purchased online and was shipped to me (Note: this comment written on an iPhone)


opinion

I think that overall your article hit home a little too much for me. What I can tell you is that a one year contract is a waste of time for VZW. Since VZW pro-rates ETF and if they are all ready willing to offer you a $50 discount off the 2 year price that the benefits of a one year to a two year contact definitely outweigh each other since if you disconnect one year into it with the pro-ration you make out even or up depending on price that it will make no difference. Take advantage of the cheap price upfront and get a phone and if you don't want the service disconnect. But you need to think a little more into what you're getting into and realize this. It's like buying a car in some sense. So think about price for phone, price for monthly and price for disconnecting.


incompetence

And people argue that governments are incompetent and that privatization would be an improvement.


Capitalist bureaucracy

It's called "capitalist bureaucracy" no different from government bureaucracy. That plus the stunning ignorance of the employee [directly attributable to the employer]. Here's a story, not so high tech. I wanted a rubber stamp with my name and email address on it. I went to Kinko's and asked the nice, young lady if Kinko's sold rubber name stamps. She didn't know what I was talking about. She offered to sell me postage stamps. I declined. She went to the no less young manager who didn't know what a rubber name stamp was either. They then convened an impromptu staff meeting at which I described what a name stamp was, ink pad, hand held, etc and how it worked. Their astonishment probably equaled the astonishment of the Native Americans who first saw Columbus. But then I have shirts older than any of the employees. After the staff meeting they concluded this Kinko's did not make name stamps. Capitalist bureaucracy combined with zero training.




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