iPhone in Canada Blog - Canada's #1 iPhone Resource: Rogers Considers Eliminating Subsidies on Smartphones Such as the iPhone

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Rogers Considers Eliminating Subsidies on Smartphones Such as the iPhone Apr 25th 2012, 19:29 By Gary Ng on April 25th, 2012 0 Hello there! If you are new here, you might want to subscribe to the RSS feed for updates on this topic. Rogers CEO Nadir Mohamed believes it is time for Canadian carriers to look into eradicating smartphone subsidies, he said at the company's annual general meeting in Toronto, reports The Globe and Mail: Mr. Mohamed said Rogers is the first in Canada to tackle the subsidy issue, because of its position as the industry's market leader. He said when smartphones first came to market, it was essentially a choice between a BlackBerry and an iPhone, and customers expected subsidies in exchange for their heavy use. But with a host of new competitors offering lower-cost products – such as Sony, HTC and Samsung – Mr. Mohamed said the companies will be able to better match phones with customers. Just yesterday Rogers announced its 2012 Q1 earnings, where it was reported wireless voice revenue was on the decline but offset by higher data revenue. It was also revealed iPhone activations increased by 35% compared to the year ago quarter. An anonymous shareholder at the AGM raised the same issue to Rogers as to why they continued to pay for iPhone subsidies–when customers are eagerly lining up for Apple's smartphone. Apple announced $11.6 billion in profit yesterday for its 2012 second quarter, and derived more than half of revenue from its 35.1 million iPhone sales. Mohamed mentioned as people start out with cheaper introductory smartphones and smaller bucket data plans, Rogers can even eventually steer them towards higher-end products and richer data plans. "People want to start out with smaller buckets of data as a way to get into the category," he said. "This business hasn't used segmentation, which is a standard piece of business in other parts [of our business]. You will see that going forward as we start targeting different segments." Are consumers willing to pay full price for the iPhone? Of course. We've seen line ups for unlocked iPhones outside Apple Stores. But on the other hand there are those that always want to sign contracts to get a subsidized device. What's your take? Get rid of subsidies altogether along with contracts and go back to the good ol' days? [via The Globe and Mail] Gary Ng Founder and Editor-in-Chief of iPhoneinCanada.ca. Follow @iPhoneinCanada and on Google+. Click here to save 20% OFF at ZAGG.com with coupon 'iphoneinca'!

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