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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 163.33-1.0%3:59 PM EST

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To: Clarksterh who wrote (18223)11/23/1998 9:35:00 PM
From: Drew Williams  Read Replies (1) of 152472
 
<< Many people seem to assume that the only prices available are the subsidized prices. This is not true. There are stores that sell unsubsidized phones - i.e. with no contracts. I have no idea who buys them, or why, but they do exist and again the prices I quoted were from such vendors (I'd post them here but the net is really bogged down so I can't get back to the sites). >>

Clark, Sorry to take so long to answer your question, but I'm about two hundred Qualcomm posts behind and it is getting worse. (I'm farther behind on Lucent, but I'll probably skip that.)

My wife owns her own company, and the company pays for her cellular service with pre-tax dollars (mine, too, until my new employer handed me a phone.) After eleven years, her cellular number (printed on her business cards) is sitting in many hundreds of Rolodex's in metro Philadelphia. It would be dreadfully disruptive and expensive for her to change her phone number and notify all these people. So, she cannot change carriers, at least until she can take her phone number with her, which she could not do the last time we needed a new phone.

About two years ago, the handset cord failed on my Radio Shack branded Nokia hardwired car phone (then in its ninth year and third vehicle -- no complaints.) The carrier we used (a no-name reselling Bell Atlantic service at a significant discount to Bell Atlantic) did not offer subsidized phones to existing customers. Both Bell Atlantic and Comcast, the primary carriers around here, offered subsidized phones if I would switch carriers. I decided I wanted an Ericsson AH-310 (no QCOM available then), which I could get for $.01 with a one year Comcast contract or $189.00 without from a discount phone store. I checked into my pattern of use, ran the numbers under my existing carrier against Comcast's programs available at that time, and found my breakeven was about eleven months out. In other words, buying the phone at the higher price was actually less expensive assuming my pattern of use did not change and I stayed with the same carrier for at least eleven months. And that is what I did.

Not having been in the market for a while, I do not know whether this would be the best strategy today, but it would not surprise me.

PS, since then my wife's Radio Shack branded Nokia hardwired phone (in its tenth year and third vehicle) also died the death of the dead handset cord just about the time I got that new job that came with a phone. Instead of buying her a new phone, I reprogrammed the Ericsson with her number and gave it to her.
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