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The Phony Smartphone Price War

Cingular Wireless countered Verizon Wireless 's launch of the $200 Motorola Inc. (NYSE: MOT) Q smartphone with its own two-bill device this week -- the BlackBerry 7130c from BlackBerry .

Analysts and users suggest, however, that despite the arrival of sub-$350 smartphones on the market, operators will still find a way to make a buck or two a month. "This is not a 'price war,' " cautions Gartner Inc. analyst Ken Dulaney. What's really going on, he adds, is that the upfront costs are smaller, but monthly service fees may be getting larger.

The BlackBerry 7130c costs $199 with rebates from Cingular. Consumers can get unlimited data access and download their web-based personal email for $29.99 a month. Enterprises can get access to their email via the BlackBerry Enterprise Server for $44.99 or use the gadget as a data-only device for $49.99. Other than the enterprise data-only plan, however, all these options require the user to also buy a "qualified voice plan" from Cingular with the smartphone. "BlackBerry 7130c is $199.99 with 2 year contract and after a $50 rebate provided when the customer also chooses a Cingular calling plan that is $39.99 and higher," says a Cingular spokesman.

Meanwhile Verizon will sell you the Motorola Q with unlimited data and 450 voice minutes for $80 a month. The most expensive plan it offers with the phone is $170 a month.

"Wow," says Roger Cass, CTO at Cincinnati-based healthcare firm MediSync, when told of some of the pricing options. He says that pricing for voice plans for a "regular, dumb phone" would be about $30 a month. Users could add a data plan for another $25 to $30. The total price isn't that different from the lowest Q plan, he points out.

Spreading the extra data costs across a number of enterprise users can soon add up though. "It's one of the reasons we haven't really moved to supporting data plans in the enterprise, it's so expensive that we haven't been able to justify it," Cass says.

— Dan Jones, Site Editor, Unstrung

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