Techno-Marketing

Mobile Operating System Pricing Strategies

I recently read an interesting editorial on Engadget that discussed the pricing strategies currently employed by mobile phone manufacturers for software updates. In the article, Chris Ziegler discusses the issues associated with providing updates for free, and the potential consumer benefits that could be attained by switching to a paid model.

Smartphones are, essentially, just computers themselves, but Ziegler makes the point that while paying to upgrade from Windows Vista to Windows 7 makes sense to consumers, new versions of smartphone operating systems are generally expected to be free. The primary issue with this “free upgrades” model is that consumers fail to realize that only the monetary portion of the price is going away: not the price itself. Without a monetary price attached, companies do not feel as obligated to support older products for as long, and consumers end up paying with their time (companies do not need to update older phones as quickly) and the overall utility of their phones (companies may drop support of older devices sooner). This issue has become particularly prevalent for Google’s Android smartphones, in which older models commonly have to wait months after release to get updated, if they get the updates at all.

Ziegler suggests that companies begin charging for new updates, in order to create an additional incentive (aside from boosting customer loyalty) to support their products over the long term. It has gotten to the point where many companies only support phones that are still on sale, and even those who do support discontinued models do so on a delayed timeframe in order to achieve maximum “market impact” rather than serving their customers to the best of their ability.

I highly recommend reading the whole article, as it is extremely well written and poignant for mobile phone enthusiasts.