May 31, 2011 | by Andrew Kameka
Why are Verizon 4G phones so expensive? Smartphone buyers – and Android phone buyers, especially – have grown accustom to paying $199 when buying phones on a two-year contract. But the 4G LTE Verizon phones that have launched have so far raised the price ceiling as high as $299. It appears that customers must get use to that higher ceiling if they wish to get 4G service.
During a recent press briefing on its 4G network, a Verizon spokesman confirmed that 4G phones cost more on contract because they cost more to make. Due to LTE not being available nationwide, phone manufacturers must include radios for 3G CDMA and 4G LTE networks. Since phone makers charge Verizon more money, the carrier cannot offer subsidies as large as previous phones.
“These are premium devices and far more expensive to manufacture,” says Tim Mills, regional director of data in Florida. “Outside of [multiple radios], there are larger screens and new features. We believe that the value that these features add at a $50 price increase, customers will see the benefit.”
LTE phones may be worth the extra upfront costs, but it will take time for Verizon to ween customers off the expectation of sub-$200 phones. It will also take time to have those customers fully satisfied with battery consumption of Verizon 4G Android phones. Both the HTC Thunderbolt and Samsung Droid Charge lose power quickly when LTE is enabled, a sore spot for consumers pleased by fast speeds but upset by how short the time is to enjoy them. That will change in the coming months.
“As the LTE network becomes more ubiquitous, there will be less handoffs between 3G and 4G, and that is a battery drainer,” says Frank Wise, Verizon’s executive director of network in the Florida region. Wise promises that work is being done on two fronts as Verizon is working with manufacturers to optimize both its network and hardware to consume less power.
Verizon has raced far ahead of rival AT&T in its 4G LTE roll-out, reaching 72 U.S. markets before AT&T announced its plan to launch in 5 markets. Verizon boasts that it will be in 175 markets before the close of 2011.