Digital World: Replacement Mathematics

Some people - an ever-shrinking minority, from the looks of things - still believe that a cell phone should be just that.

By DAVID SHAMAH
June 19, 2007 07:19
Digital World: Replacement Mathematics

computer 88. (photo credit: )

 
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Like the pushcarts of old, you can't traverse a shopping district in Israel - these days, known as malls - without tripping over a cell phone sales/upgrade station. They're everywhere, showing off their displays of the latest and greatest 3G and beyond phones with cool data services, MP3 players, super-sophisticated still and video cameras, and anything else phone manufacturers can throw in to get you to "upgrade." Some people - an ever-shrinking minority, from the looks of things - still believe that a cell phone should be just that. If you want e-mail, RSS, "content" delivery, music or any of the other time wasting toys that are a feature of modern life (hey, it is what it is, as they say) - well, that's what the computer is for. Save the phone for voice conversations, because that's what /it/ was made for. But like I said, the minority that believes this is shrinking - by the day, if not by the hour, judging from the new, sophisticated models the cell phone companies keep pushing. And why not? The people get what they want - and the cell phone providers make a ton of money off these phone upgrade sales! As a loyal customer of one of the local cell phone service providers - with four phone lines to my credit and a gaggle of teenagers at home who are enamored of the tricks their phones can do - I have experienced the upgrade thing firsthand, several times. Usually, "they" (the service providers) get you when your phone needs a repair; they can offer you, they say, a much better deal on a new, better phone, and you have the "luxury" of paying it off over three years, as part of your monthly bill. And they're prepared to give you a good (i.e. cheap) deal to sign you up, with low rates on service - and a decent monthly charge for a basic phone. At Orange, for example, you can sign up for the family plan, which lets you call each number in the plan for 26 agurot a minute with a NIS 1.90 monthly basic charge - and you can get a perfectly serviceable basic phone to do it on, like the Motorola C168, with GPRS/WAP and an FM radio, for NIS 16 per month for 36 months (total price NIS 576 over the period). But for most people, basic isn't enough after awhile. For kids, there's the coolness factor, as everybody wants to be able to show off their device during recess - and what would a boring class be without games, SMS, and WAP surfing? For adults, status is of course a factor, but even for the practical and money-saving minded, the idea of converging a bunch of "devices" - PDA, phone, MP3 player, camera - has strong appeal. So you find yourself wandering towards that display case in the mall; "I'm just looking," you tell yourself - until you wake up out of your trance to find yourself with a new phone, a new contract, and a new monthly payment! And while you may or may not be fully satisfied with your purchase, having calmed down enough to have buyer's remorse as you consider what you could have done with that new NIS 40 monthly phone payment for the next three years, I can guarantee you that you've made your cell phone service provider very, very happy. Not just because they sold you a new phone - but because they sold you a new phone that they bought much more cheaply on the "free market!" Yes, it's true: If you check out the device pages of the Israeli cell phone providers, you'll see the full range of devices offered, along with their prices. Now open up your Web browser and Google that same phone; chances are you'll find it on Amazon, Ebay, or some other major Web sales site. Now open up your calculator and figure out the price Pelephone/Cellcom/Orange et al are charging for the phone, and how much you can buy it for, were you fortunate enough to own a Star Trek style transporter which could deposit you in New York or London and bring you back home safely! Unfortunately, transporter technology being what it is these days, you're more or less stuck with the prices and choices - not always the most up to date, unfortunately - offered by the cell phone provider. Unless, of course, you're willing to "think outside the box" - and do a little "personal importing," ordering your phone abroad and reaping a significant financial benefit! Now, this won't work - or apply - to everyone. If you're customer of Orange or Cellcom GSM, you know that it's a simple matter to open up the back of your phone and move your SIM chip to another device. Many people who travel abroad do just that, purchasing an unlocked tri or quad GSM phone (Orange phones use the GSM 900/1800 frequencies, and Cellcom GSM 1800) and coming home with a fancy new phone. Whether or not they declare their purchase at the airport is none of our business, but note that travelers can bring in electronic goods "for regular personal use," according to the Finance Ministry import duties Web site, of up to $200 in value. If you're willing to finance your own phone, you can buy a Nokia E61 PDA smartphone for about $400, instead of the NIS 2340 ($563, at NIS 4.15/$) Orange is asking. It also won't work - or apply - when the providers are having a sale, such as the one going on now, where some nice looking phones are on sale for half price, if you commit to a talk plan for three years. The Sony Ericsson W880i is now NIS 1,404 (NIS 39x36), making it significantly less in dollars or pounds than Amazon USA or UK is selling it for unlocked (about $529). Of course, you could ask why a phone offered by a service provider requiring a three-year contract should cost almost the same (at half the "regular price" off!) as an unlocked phone outside of Israel, allowing you to join or drop out of talk plans at your discretion - when American and British service providers practically give away to get you to sign up. But we won't - at least, not yet. Sales, of course, don't last forever. So, if and when Orange (or Cellcom or Pelephone) jacks up the price of a device to its regular level - NIS 2,808, or $676 - it could come out cheaper to order, ship, and pay taxes on an unlocked cell phone upgrade than it would to buy it from the service provider. That W880i, which costs $439 at USA discounter Tiger.com (http://tinyurl.com/2mtfth). According to this site by the Ministry of Finance (http://tinyurl.com/yt8rg7, in Hebrew), the maximum customs and taxes (including VAT) on cell phones is 32.8% - maybe less, depending on the country of manufacture - for a total of between $150 or $200, depending on the valuation the customs people put on the product, plus about $35 shipping. With the 880i, as it happens, there's no real financial advantage to ordering from abroad, but there is a strategic one, in that you don't have to recommit yourself to a new plan. You also don't get an extended warranty from the service provider (although those plans aren't free, either). But when it comes to higher priced devices, like the new HTC TyTN - $729 at Amazon USA, vs. a whopping NIS 4644 ($1129) at Orange - you could save a nice couple of hundred shekels, or even dollars. Of course, the most advantageous way to do this is to seek out models on sale compatible with your network that offer great value - some of which aren't even available in Israel yet, like the Motorola A1200 Ming (http://tinyurl.com/2dn9w3), only $329 at Amazon USA and easily comparable to the iMate K-Jam (NIS 6480/$1541 at Orange!), except for the keyboard. Just swap your SIM card into the Ming, and you're in the smartphone/PDA business, with a phone that's got all the audio, video, applications and phone services you could imagine, including a scanner that will read text on business cards and turn the data into contacts automatically! I know that this sounds risky, but it really isn't (they insure everything these days!). There are other benefits to getting an unlocked phone, but I'm running out of space. Bottom line: Think twice, and keep your wits about you when you're roaming the mall and bump into that stand with all the nice, new shiny - and expensive - cell phones! hHttp://digital.newzgeek.com

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