The Biggest Rip-offs and Best Bargains in Consumer TechReading Time: 5 minutes
I’ve been thinking about pricing for various consumer tech products and services and there are some aspects that are incongruous. For example, how is it you can host a conference call for 150 colleagues for free using FreeConference, yet the minute you leave the U.S. with your cell phone, pricing leaps to the stratosphere? So, here’s my admittedly subjective list of the biggest rip-offs and best bargains in consumer technology.
1. International Cellular Roaming. This is the last bastion of 1970s era telecom pricing. Voice calls can average $1.00 per minute or more and data pricing can be 10x what it costs in the U.S. T-Mobile offers more favorable international roaming rates, especially within North America but exorbitant international roaming rates are one of the most common consumer frustrations in tech.
2. Apple Storage. There’s storage. Then there’s Apple device storage. Apple charges $100 more for an iPhone 6s with 64GB of storage compared to the 16GB model. By contrast, a 32GB microSD card for Android costs $15 or so. To really put things in perspective, $60 buys a 1TB external hard drive for a PC.
3. Cable Box Rental. If you are a cable TV subscriber, you’re likely paying some $200 or more per year for the privilege of renting a set-top box. And there’s no choice in the matter. This is a bonanza for the cable companies, sort of like the $4 billion in baggage fees collected by the airlines every year. The FCC is onto this, with its recent proposals to unlock the set-top box and promote competition.
4. Most extended warranties. Much ink has been spilled (what’s the digital equivalent of that term?) advising consumers not to buy the extended warranty on most consumer electronics products. But the extended warranty is still a part of the pitch, especially when purchasing at a retail location. Usually it’s not worth the price, although Apple Care and some of the cellular ‘insurance’ programs are worth it if you’re a serial phone dropper or need a lot of tech support.
5. Printer Ink. This is the consumer tech’s best ‘razors and blades’ product. HP might well be out of business were it not for high margin ink sales over the years. There are some workarounds and the occasional bargain if you look hard enough, but nobody who buys printer ink is happy about the price.
6. Cable Unbundling. A significant percentage of cable subscribers are paying for a bundle of broadband, pay TV, and phone services. Most consumers believe they’re paying too much for that bundle. But try taking that bundle apart and the picture gets even worse. Ask for a broadband only plan from your provider and that cable part of your bill starts looking more attractive.
7. Wi-Fi Access Points. For the important role that Wi-Fi plays in our daily lives, dropping $100 for a decent Wi-Fi AP seems like a reasonable expenditure. My beef, however, is it’s very difficult for the average consumer to determine the right mix of quality and value in this product category. Many Wi-Fi APs have similar specs (generally undecipherable to the average consumer) but prices are all over the map. There are some clearly superior APs, but they come at a significant price premium.
8. Fees on Most Telecom and Cable Bills. Telcos and cable providers are great at turning that $99 plan into $140, once taxes and fees are included. My latest cable bill has 10 separate “taxes, surcharges, and fees” on it. Call to complain and they largely blame it on the government and the FCC. But I am sure there are certain fees that are not all going into that specific regulatory coffer. An example of fee creep: RCN, which offers a competitive cable and broadband service in some markets, has separate ‘surcharges’ for broadcast TV, sports, and entertainment. Sort of like a ‘movie surcharge’ if you go to a movie. Hmm…
9. International Voice Calling. It is still easy to fall into the trap of paying some exorbitant price for the occasional international call. You see it on the phone bill and say Whoaaa! For those who make a lot of international calls or who hunt around, there are tons of inexpensive options – Skype, FaceTime, some specific international calling plans offered by the telcos – but for the casual caller there’s bound to be the occasional gotcha.
1. Music Streaming Services. Compared to the physical or digital download world, paying $10-15 per month for access to a vast library of music content is one of the best values available in the digital world. In reality, these services should cost a lot more because I’d like to see more money go to the artists.
2. Netflix and HBO. I separate these folks out because they are spending billions on creating fantastic original content. Paying $10-20 per month for access to their entire library, on demand, on any device, is great value for money.
3. Amazon Prime. Even though the price went from $79 to $99, the vast majority of Prime subscribers believe they are getting a great bargain, even if they just use it for the free shipping benefit. There are, of course, several other features of Amazon Prime that make it an even better value. This will be one for the business case history books.
4. A mid-priced Android phone. Many people believe that, even though smartphones are good products, they’re expensive. That’s certainly true of the high-end, flagship phones, such as the latest iPhone or Samsung Galaxy device. But there’s an increasingly impressive array of very good Android phones in the $300-400 range that offer nearly the same capabilities as top of the line products. This is not a huge outlay considering the range of things one can do from a smartphone today.
5. Free Conference Calls. This is one I have never been able to figure out. How do services such as Freeconference.com, which allow you to host a call for up to 100 people, for free, make money? Yes, I know – it’s a freemium model. But you have to admit to wondering, “how can this be free?”
6. Web site domain names. It’s $10 a year or so to own a domain name. That’s one of the best bargains in digital real estate. It’s a bit incongruous given the many smarty pants who bought a domain like clothing.com on the cheap and sold it for a gazillion dollars. But the domain name party has been the digital version of the 1860s Homestead Act.
7. Voice calling. Voice calling has become practically free. It’s included in most cell phone plans and cable/telco ‘triple play’ type services. Even if you’re still dependent on a ‘landline plan’, there are inexpensive VoIP plans, provided you have a decent broadband connection. So, with a few exceptions, if you’re paying more than $10 a month for domestic voice calls, you’re paying too much.
8. Tax Software. Yes, there’s a bit of baiting and switching here with the more popular services such as TurboTax. It’s free! No, wait, if it’s more than 1040 EZ, then it costs. Then there’s the State return, and so on. But even at $50-100, which is what most people spend, it’s a pretty good bargain. And these folks seem to do a pretty good job of keeping up with our increasingly complex tax code.
9. Google Maps. I have kept free, ad-supported services such as Gmail and Facebook off the ‘bargains’ list, but then I started thinking about what app or service would I be glad to pay $100 a year for and came up with Google Maps. First, it’s a valuable product, used frequently, that continues to improve and second, the advertising component of this is a lot less obvious or intrusive than many other apps or services.
I’d welcome your thoughts and ideas on this list!