August 14, 2015
The Biggest Cell Phone Ripoff
The four largest smartphone providers are overcharging for their products. they can pay as little as a sixth of what they are charging their customers for. The area where they ripoff people the most is in their storage space on the devices. The phone companies fully understand and manipulate the demand for storage.
The issue is that customers are overpaying while only four companies are sailing in business. This could lead to worse conditions and monopolies in the phone industry. People quickly fill up the memory on their phones with personals like photos, apps, music, videos, and other files. Instead of looking for alternative ways to store their personal likes, they feel as if they are forced to pay more for what they want.
The evidence on this issue is that companies only pay an extremely low percentage of what they are selling. Apple for instance only pays $7.55 for every 16GB they program into a phone compared to the consumer price that jumps from $299 for a 16GB to $399 for a 64GB. These facts come from a patent consultant that tears down gadgets, Putting this problem in an overall sense, it is a $53 production difference between Apple's base model phone and top-of-the-line model while it costs consumers $200. This is an example of a too high Consumer Price Index. Customers are paying too much while already huge companies are making outrageous profits.
However, with a demand this high and consumers so niece, the company is making dependable business which makes for more dependable jobs to come. The supply is matching the demand and cell phone providers are surely working the system to their benefit. Inflation is steadily rising in cell phones, and without the people gaining proper knowledge about how much their cell phone is worth, conditions will proceed to go in this direction.
Link to article: http://money.cnn.com/2015/08/14/technology/cell-phone-storage-ripoff/index.html
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