A flurry of alternative cellphone providers have hit the streets in the past year, offering consumers smartphones that aren't bound by the traditional two-year contract.
But even though new pricing structures from
In most European and Asian countries, the mobile market is different, with a host of midrange, affordable phones available to buy outright. So why are Americans still so limited in their phone choices?
It's largely an issue of transparency. In the U.S., traditional plans offer tempting, subsidized upfront prices on must-have phones like the iPhone 5s and Samsung Galaxy S4 by getting you to sign a two-year contract. Customers pay off the rest of the phones' cost each month of their contract.
However, when your contract is up, your bill doesn't go down -- even though the phone is more than paid off. Consumers are expected to rinse and repeat, paying an upgrade fee for a new phone and locking in for another two years. By contrast, carriers in
Subsidized or not, U.S. consumers still have fewer smartphones to choose from compared with their European and Asian counterparts. That's largely due to stunted competition: When providers hide the upfront cost of phones, there's less competition to put out quality devices that you can buy outright.
Such smartphones exist elsewhere. For example, at last month's International CES in
"I sense that right now carriers are less willing to take on any (new manufacturer) given the enormous cost associated with bringing these devices to market," said
There's also the basic matter of what consumers want to buy, which differs from country to country. "You go into some other countries and the customer base has different preferences in terms of type of device," said
For instance, Japanese phones are tied into a nationwide earthquake-detection system, giving a few precious seconds' heads-up before seismic waves hit land. Some Korean phones can even pick up over-the-air TV. While those features likely won't show up on American phones soon, the tide is turning on phone contracts and handset availability.
The new wave of no-contract plans offer discounts on handsets, which can cost as much as
There's even been some significant movement toward marketing right-priced handsets off-contract. Most notably, Motorola showed just how affordable a reasonably powerful smartphone can be, releasing the Moto G for just
"You're getting capabilities that two years ago you would have gotten in a really high-end phone, available in a lower-end phone," said Menezes.
U.S. carriers we reached out to declined to comment. The analysts we talked to seem to agree that the process is messy and complicated for the providers.
Ultimately, the lack of diversity and the complications added on by our particular marketplace have led to less choice for consumers. The tide may be turning, but it'll be a while before contract-conditioned American shoppers truly understand all the options presented to them.
For more product reviews and news, visit Reviewed.com, a division of USA TODAY, and follow @ReviewedDotCom.
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