DoCoMo board member and head of strategy Noriaki Ito suggested that subsidizing handsets is too expensive for carriers and not in the handset makers best interest, either. The subsidies are a financial burden to the carriers in Japan's saturated market where subscribers take advantage of the subsidies. In some cases it costs carriers $428 per phone. Ito proposed a hybrid system where more of the phone cost is recouped over the life of longer contracts through installment payments. Hmm, not sure "longer contracts" will work here in the U.S. That said, since the U.S. and Japan are notorious for handset subsidies perhaps changes that occur in Japan could serve as a lesson to U.S. operators.
For more on the DoCoMo strategy:
- check out this article from Wireless Week