Why the iPhone rules the US: cheap smartphones don't exist

Why the iPhone rules the US: cheap smartphones don't existAndroid may have the edge when it comes to smartphone sales in this country - but then again, we have a more competitive market than the US.

Don't agree? Well, researchers have some figures you might be interested in taking a look at, figures that prove non-iPhone users on contract have a far better time of it here than across the Atlantic.

According to Benedict Evans of Enders Analysis, the reason why the iPhone commands fully 50% of the smartphone market in the US (as opposed to around a third elsewhere) is that it offers better value for money versus its rivals than is the case elsewhere.

It comes down to how monthly contracts are structured. In the US, networks base their contract deals around much higher overall use, which increases the total cost of ownership (TCO) of even entry-level smartphones to a baseline far higher than is possible in the UK, and more importantly far closer to the cheapest availabe iPhone package. In fact, the difference is as little as $200 - and that's spread over two years, don't forget.

Evans points out that in the US, the entry-level $80pm iPhone contract adds up to a TCO of $2,120 once you factor in the $200 up-front cost of the handset itself. But with even the cheapest of equivalents (handsets offered free on contract, in other words) still commanding that basic $80pm monthly cost, the maximum you're able to save by looking elsewhere is just $200.

In the UK, meanwhile, our much wider range of tariffs means that iPhone users using their handsets sparingly can get away with a TCO of just $998, which sounds great until you realise that the cheapest smartphone can be had for a TCO of just $384. Compare that to a cost five times higher over in the US, and it's easy to understand the appeal Apple's Jesus Phone has for American types.

Via The Guardian

Read more about: Apple iPhone 4S

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17 comments

barrybarryk  Jun. 18, 2012 at 18:08

Android may have the edge when it comes to smartphone sales in this country - but then again, we have a more competitive market than the US.I think you'll find that's the exact opposite of being 'more competitive'

matt101101 / MOD  Jun. 18, 2012 at 18:15

I think you'll find that's the exact opposite of being 'more competitive'
Hahahahahahahahahahahahahaha

You really think our networks cost more for the end user to access and have a tighter stranglehold on the market than the US carriers...? Cheers for the laughs, I've been needing that ;).

barrybarryk  Jun. 18, 2012 at 18:20

lol yeah my bad I originally read it as 'We have a more competitive market in the the US'

matt101101 / MOD  Jun. 18, 2012 at 18:24

Good, good...I thought I had a true crazy on my hands ;).

SpeedyG  Jun. 18, 2012 at 18:41

Is the Pay as you go market in the US any better?

I know from someone in another forum, Americans pay through the nose for data which has more limits than here.

'Unlimited data' doesn't exist in the US yet lol.

matt101101 / MOD  Jun. 18, 2012 at 18:44

'Unlimited data' doesn't exist in the US yet lol.
Not strictly true, it's more they've already abolished it than they haven't yet got it. The only way to have it is to be grandfathered into an ancient data plan (though I think it's Verizon only let you use 3G, not 4G, on unlimited grandfathered plans, if you want 4G access you have to move to a tiered plan).

matt101101 / MOD  Jun. 18, 2012 at 18:46

Basically, the carriers in the US have the entire mobile phone market held by the b*llocks. Only the iPhone and Galaxy S3 have ever managed non-fiddled launches on all 4 major US carriers...even then you still have the CDMA crap.

Treab  Jun. 18, 2012 at 18:58

America.. what a nation... $80 bucks for a basic phone package... thats the same as our most expensive ones O.o that is shocking tbh.

the only way around that price is to have a dual phone tarriff... bizarre system...

matt101101 / MOD  Jun. 18, 2012 at 19:06

Don't forget the fact they pay hundreds of dollars for the phone itself too. There's no free smartphone with your contract, like there is here in the UK.

Treab  Jun. 18, 2012 at 19:19

I just checked best buy... $80 at and t deal free atrix 2 or 49.99 for the iphone 4.

AhmadCentral  Jun. 18, 2012 at 21:36

Now they're even charging $299 for top range smartphones on launch where as the 16GB iPhone 4s is just $199 on contract. Makes sense why people are going for iPhones as they save $100 over the 24 months.

I'm glad the UK hasn't gone this way yet of charging high upfront costs with high cost tariffs where adding on texts doubles the price per month.

spruceyb  Jun. 19, 2012 at 09:42

Only the iPhone and Galaxy S3 have ever managed non-fiddled launches on all 4 major US carriers...even then you still have the CDMA crap.

Only the Galaxy S3.

As iPhone is only on 3 of the (big) US carriers, iPhone doesn't support 3G on the AWS band.

matt101101 / MOD  Jun. 19, 2012 at 09:54

True, I forgot T-Mobile still haven't got the iPhone, my bad, I apologise.

krogothnx  Jun. 19, 2012 at 10:37

'Unlimited data' doesn't exist in the US yet lol.
Not strictly true, it's more they've already abolished it than they haven't yet got it. The only way to have it is to be grandfathered into an ancient data plan (though I think it's Verizon only let you use 3G, not 4G, on unlimited grandfathered plans, if you want 4G access you have to move to a tiered plan).


not true, Sprint still offers unlimited data plans for new customers.

you also have to remember, while most data is limited now in the US, i think their middle to high usage allowances range from 2GB to 5GB. can't really say the same over here for limited data (particularly o2, who still think 1GB is a massive amount... morons.)

matt101101 / MOD  Jun. 19, 2012 at 11:35

On the other hand, from what I've heard, Sprint's data is so slow it'd be quicker to walk to a library and look things up for yourself...

blarelli  Jun. 24, 2012 at 02:15

Android may have the edge when it comes to smartphone sales in this country - but then again, we have a more competitive market than the US.I think you'll find that's the exact opposite of being 'more competitive'

No, they are spot on. Here in the states, your run of the mill iPhone costs $200 when you sign a new contract. Apple forces the carriers to subsidize their phone at a much higher rate than other phone manufacturers are able to, so you end up with a $700 iPhone for $200 or a $500 android phone for $200. If the iPhone was subsidized by carriers at the same rate, people would be shoveling out $400 for a bottom end iPhone.

matt101101 / MOD  Jun. 24, 2012 at 12:43

Then look at your monthly charges and late release dates for most phones....

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