Samsung Note 9 pre-order perks?

[postulative]

My current phone contract is due to end in a couple of months, and as a keen consumer of technology I was interested in seeing whether I might afford the new Samsung Galaxy Note9 (to give the phone its official name).

Telstra and Optus both had ‘pre-release’ offers; Telstra’s was out of my price range and so I looked more closely at the Optus offer. This was for ‘pre-orders’, and so expired on 23 August.

The Optus offer was to upgrade - ‘free of charge’ - the phone you leased/bought on a plan from the 128GB Galaxy Note 9 to the 512GB version of the phone. To do this, and get 20GB/month of data, would cost $95/month for a 24 month lease.

Now that the pre-order period has ended, one can get the 128GB version of this phone on a lease from Optus, with 30GB of data/month, for $79/month!

It seems to me that Optus misled its customers with its pre-order offers, by claiming that it was offering a free upgrade to the larger storage version of the phone when in fact once the pre-order period ended one could get the smaller capacity for less money!

1. How is this not misleading and deceptive conduct?
2. How would anyone who actually took advantage of the ‘offer’ feel now, looking at the prices they could have paid?
3. Is this something that the ACCC would like to know about?

I am glad I didn’t fall for the fake urgency and fake offer, but there are presumably thousands of Australians who did get sucked in by it.

[mark_m]

Optus are currently offering 15+15GB of data for up to 24 months on a 12 month contract discounted to $36pm. That is for a sim only deal.

Does it make any sense at this rate to add a contract for a new phone or should you purchase one outright?

[postulative]

Mark, my concern here isn’t about the best possible deal - I like my modern technologies! The issue for me is the behaviour of Optus:

1. Before the phone was released, customers could sign up to a plan and get the fancier version for the same price as the lesser model.
2. After the phone was released, the price of plans dropped.

Now it seems obvious to me that Optus must have therefore been lying when saying that it was offering a discount pre-release given that the price went down post-release. Yesno?

[grahroll]

I guess it could partly depend on the value of the different variants of the phones and what offset Optus offers on the handset component of the contract for each one (sometimes this “discount” varies quite a bit). I would assume that the 512 GB version is much more costly than the 128 GB version and that a $16 a month price increase over a 2 year period, taking into account any variations in the discount offered may still not adsorb the extra cost even with a smaller data plan. I could be wrong in this assumption as I do not follow the pricing of these items. Perhaps that could be checked?

The “free of charge” may be referring to the cost of moving from a previous phone to a new/er phone earlier than a normal contract would allow and I guess the T & Cs of the plans would need to be read to see if that is the case??. EDIT: It normally costs $99 to do the changeover.

I don’t think 10 GB a month would affect the price drop to the $79 per month and the $95 might reflect a bargain insofar as Optus offers “bargains” on the handset (by my reckoning the prices paid for mobile data are mostly ripoffs but that is another topic altogether).

Checking their SIM only plans shows that a “on special” 30 GB plan (which is a special offer giving the normal 15 GB data allowance another 15 GB bonus data a month) will cost $36 a month (was $45 a month with only the 15 GB originally) and that for $35 a month you get 6 GB of data, there is no 20 GB plan. The next plan up originally was 25 GB but has doubled on the special to 50 GB and now costs $44 a month from it’s normal $55 a month. This special offer ends 2/9/18.

Went and checked the Optus deals, they do state the plans on the Galaxy Note start at $89 to buy a phone. The $79 a month refers to leasing the 128 GB phone for the 2 years ie it is their $79 data call plan (a special plan only for the 128 GB one) & $0 leasing costs, the 512 GB one for the leasing starts at $45 data call plan and $50 handset leasing cost ie $95 per month. To buy the handsets on the plan costs are starting from $89 for the 128 GB model ie $79 data call plan and $10 handset cost, the 512 GB starts at $105/mth ie $45 data call plan (2 GB a month data) & $60 handset fee. There is no $79 data call plan for the 512 GB.

All this shows that you can’t really compare the 128 GB costs to the 512 GB costs. They are both quoting differing starting points re the data call plans and the offset they require on the handsets is widely different with the 512 attracting a much heftier handset cost and this handset cost varies even on the same phone depending on which data allowance you buy into.

If you compare the two based on the same 2 GB plan ($45 a month data & call) the 128 costs $95 a month (handset cost is $50 a month in this one) and the 512 at the above noted $105 a month. So the 512 GB getting 20 GB a month for $95 a month was a bargain compared to the $115 a month it now costs to get that same 20 GB and anyone who then purchased it on that special offer are probably feeling very happy.

@mark_m

add a contract for a new phone or should you purchase one outright

Checking the RRP of both phones it would seem that signing up for the handset as part of the contract can save you a few hundred dollars.

If we take the 128 GB one and use the $89 per month purchase plan ($10 handset fee ) the handset would cost you $240 to buy it. If bought outright the cost is about $1,499. At worst on the plans you pay a $50 handset fee so $1,200 over the contract period saving about $300 on outright purchase cost, and on the best handset cost ($145 per month 200 GB plan) the fee is $0 so the phone costs you nil.

The 512 GB one costs about $1800 outright but at the worst handset cost point ($60 a month handset cost) you would pay $1440 for the phone saving about $360 and at the $145 plan you again pay $0 handset cost so the phone costs you nothing. There is a special plan cost for the 512 one which is $142 a month giving a data allowance of 100 GB and the handset cost is $17 a month but for another $3 a month you get an extra 100 GB and the noted $0 handset cost.

What this all means is that there is no rhyme or sense to the way plans and handset offsets are calculated and perhaps this confusion is what these companies aim for so they can never be pinned down to any devious practices…well not often anyway.

[postulative]

I am clearly failing here at explainoration.

The prices up to and including 23 August have been replaced by the prices that are currently published (post- official release). The previous prices, that I should have screen shot (but did at least get a web chat record for), showed the minimum lease price for 128GB - with the exception of plans with 3GB or less of data/month - at $95/month. The website stated that as a pre-release ‘special’ (Telstra’s pre-release special was including a Samsung tablet), the lessee/purchaser would be upgraded to the 512GB model.

Now that the phone has been officially released, the minimum price for 128GB + 20 (and more) GB/month, is $79/month.

That is, while the company was stating that pre-orderers could get the 512GB model for the price of the 128GB model, that is true only if the standard price for the 128GB model + 20GB/month is $95. It is not, it is $16 cheaper at $79!

I understand that the telcos like to make things as difficult to compare as they possibly can, but in this case there is clear comparability between phone + data before and after pre-sale ‘special’ - and it is not as special as was claimed.

[grahroll]

Their 20 GB a month plan is $95, their special plan with 25 GB of data is $79 (both prices are for leasing).

Their pricing models are unfathomable, I don’t know how they work them out. Are they based on real costs? The $95 dollar plan gets an extra 5 GB bonus taking it to 25 GB for each month of the 24 months as does the special plan taking it to 30 GB of data. The $95 plan includes unlimited international calls to 35 selected countries but the $79 plan doesn’t but it can be added for $10 a month, making it slightly cheaper than the $95 plan but still with an extra 5 GB of data. Each extra 1 GB over the limits attracts a $10 cost…The mind wracking continues…

Even worse if you look at the $85 plan you get 2 GB data plus 1GB bonus data and the $90 plan gives you 5 GB data plus a bonus 2 GB both can add international calls for $10 a month so at the same $95 you spend on the 20 GB plan you get 3 GB of data or for $5 more than that $95 plan you get 7 GB of data. How does that make any sense? Then for another $5 added to that now $100 7 GB plan you could get international roaming and 45 GB of data ( 40 GB + 5 GB bonus).

[postulative]

@grahroll

Their pricing models are unfathomable, I don’t know how they work them out. Are they based on real costs?

Of course they’re based upon real costs - depending on how you define that.

They are deliberately confusing, as I think I already mentioned. Nevertheless, they claimed to be offering item X+ for the price of item X pre-release, only to lower the price of X post-release. That, to me, seems to fail the sniff test.

[PhilT]

My head is spinning from the analysis above that seems to take spin to a new level even for telcos. Behind all those numbers is a single issue, a dollar in Optus’ pocket by enticing customers to push ‘buy now’.

An aspect not addressed in the analysis (confusion?) is ‘time utility’ where the customer places a value on the time aspect of a purchase, ie it is here in my hand now not in 1 month (or whatever). Hand in hand there is also ‘place utility’ where a product can command a higher price by being in the ‘right place’ and even more so when in the ‘right place at the right time’.

There is a market segment that will pay premiums to be first in the queue for some thing new. How does a business price their perception of the customers’ valuing an early place in the queue? Probably at the top end of what they forecast the market will bear for the privilege. From my perspective it is usually irrational consumer behaviour but is pervasive, especially in tech or new vehicles. (Get an early model and enjoy the experience while the bugs get worked out and you suffer?)

If you can read about it, it is smokeware. If you can order it, it is state of the art. If you can hold it in your hand it is at least one and possibly more generations old. See smokeware. It is a vicious cycle fuelling its own market cycle by enticing those who need to have ‘it’ and have ‘it’ first, leading the way for the more value conscious and rational followers to join in.

The confounding pricing could be that simple.

[mark_m]

Unfortunately some of us always seem to pay a premium to be first!
Dressing it up as a special deal is perhaps meant to make us feel better about it and help justify why we are not ‘dumb bunnies’ to our friends.

Apple or any major phone with Optus may be no different. My ancient soon to be retired iPhone 4s came in the second wave barely one month after release. On a high usage all you can eat phone plan you could get the 16GB model; or for only $10 per month more a for then massive 6GB of data and either the 32GB or 64GB models for exactly the same plan cost! The 64 GB model outright was substantially more expensive than either the 16 or 32. So the il-logical confusion marketing plan has a long history.

And in general appears to have also outwitted the brains trust at the ACCC. What hope do we have.

My replacement phone and partners new phone both the same model obtained recently but 4 months apart are on different plans. One is on an inclusive contract with handset, all calls and large data. The other was purchased outright and is on an all calls lower data plan month by month. The value and price points were remarkably different over a short period.

Typically you can always find an inclusive plan on long term contract at a price point where the phone appears to be a bit of a give away, discount. But as these change so often and plans now keep offering more for less each year, not locking in to a contract may also pay over time. As mentioned in the prior threads there is much to speculate on the real wholesale price/cost of a mobile.

It is disappointing that Optus after offering a supposed special deal for early purchases is now offering an even better deal on the same or similar product. As a savy retailer I might argue that the early sales of the Note-9 have been less than spectacular and now to move stock and get some more market presence we needed to discount the phones even further. It still stinks!