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June 11, 2007

Wireless manufacturers discounts "Do" add up!

Analysis of: Consumers Holding Onto Handsets | www.wirelessweek.com
This analysis is solely the work of the author. It has not been edited or endorsed by GLG.
Analysis By:
Luke Able, Certified IT PRO
Systems and Network Engineer, Genesis Networks Incorporated
Implications: As far as this wireless technology goes, the manufacturers are creating profit potential even though it may seem like they are giving the consumer great discounts, margins are slim and they are holding onto their wireless devices longer. Manufacturers in the IT field have been playing this game for years. Let me explain. For example, it has been a known fact that computer hardware, specifically printers or we could pick something else but for now we will stick with printers. There is not much margin and hasn't been in many years with selling printers. Everyone knows this. Manufacturers make there profits in the consumables, parts and toner replacement. It's the some in computers and in the wireless industry. So it really doesn't matter to the manufacturer how long consumers are holding onto their devices. They are always going to need a new battery, new carrying case, new ear piece, etc. That is why the manufacture can nearly "give" the product away, they will make their profits.

Analysis: This is the little technique that all manufacturers use to make their profits. So it really doesn't matter if consumers hold onto their wireless devices for longer periods of time. Everyone is eventually going to need that new longer lasting battery, or carrying case or what ever else the manufacturers are pushing to go along with the device. This is also why they can basically give their wireless devices away at "discount" prices or in some instance for free with a signed new contract that the manufacturers also get a piece of.

Other Analyses of the Same Source Article:
Handset Replacement Will Continue to Shape Mobile Industry
June 12, 2007, Author: Tal Raeside, Managing Director, Insight Strategic Services
Do you think the "American automobile industry" can do it again?
June 12, 2007, Author: GLG Expert Contributor
Handsets, Market Segmentation, Carrier Subsidy
June 12, 2007, Author: GLG Expert Contributor
Telecommunications on the Edge: Dangerous Cost Curves
June 11, 2007, Author: GLG Expert Contributor
Handset Holding Lifespan and Manufacturer Margins
June 11, 2007, Author: Gregg Kail, MBA, Reseller Manager, AT&T Corp
A simpler reason yet
June 11, 2007, Author: GLG Expert Contributor
More Investment
June 11, 2007, Author: GLG Expert Contributor

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