The Hidden Cost of Device Subsidies

[Commentary] I participated in a panel discussion at the Geekwire Summit in Seattle. One of the questions we were asked by the moderator, Geekwire editor Todd Bishop, is “If you had a magic wand and could change one thing in the industry, what would you change?” My answer: I would remove device subsidies.

Purchasing phones at steep discount (subsidized by wireless carriers) devalues the incredible technology innovations coming to market. It distorts the cost of devices and creates an uneven playing field for OEMs, carriers and retailers alike. Many Americans don’t realize the actual cost of the phones they’re purchasing with a two-year contract because the cost of that phone is included in the cost of their data plan and the fees associated with their contract. We’ve also unwittingly created a disposal marketplace for some pretty amazing products.

[Brodman is T-Mobile's Chief Marketing Officer]