OUT WITH THE OLD CELLPHONE CONTRACT
c.2013 New York Times News Service
My final column of the year gives me a chance to revisit some topics from 2013 to see what has changed or what, as astute readers have pointed out, I didn’t include in the first go-round.
In February I looked at the growing popularity of no-contract or prepaid cellphones. Increasingly, I wrote, customers are turning away from the customary contract that locks them in for two years with a specific carrier.
In the first quarter of 2013, 28 percent of all U.S. cellphone customers were buying the phones without a contract, up from 18 percent in 2008. I quoted Sprint as predicting that, by 2015, 30 percent of all wireless users would be no-contract customers.
That number has already been surpassed. According to the Yankee Group, a research and consulting company, in the last quarter of 2013, 35 percent of all cellphone customers did not have contracts.
One big reason for the rise is that, although all the major carriers offer some type of noncontract plan, in March, T-Mobile did away with its standard contracts and went completely no-contract.
Online and in retail stores, T-Mobile offers only its Simple Choice plan, although a two-year contract is available at select dealers, said Robin Handaly, a spokeswoman for the carrier.
Customers start with a base rate of $50 a month for unlimited talk, text and web, and 500 megabytes of high-speed data, she said. A second line can be added for $30 a month, and more for $10 a month.
Then there is the matter of the phone. An iPhone 5s, for example, can be bought outright for $648 or over two years for $27 a month. A customer who leaves T-Mobile does have to pay off the phone.
Customers can use their own phones if they are compatible with T-Mobile’s network.
“T-Mobile is shaking up the industry,” said Logan Abbott, president of MyRatePlan.com, a comparison shopping engine primarily for cell phones.
For the first time since he began his site in 1999, more customers have purchased no-contract plans through the site than contract plans, said Abbott, whose site receives a commission when someone buys a phone or phone plan.
AT&T quickly followed with a subsidiary, Aio Wireless, which offers three no-contract plans ranging from $40 to $70 a month. For more advice in this fast-changing field, my colleague, Thomas J. Fitzgerald, compared no-contract phone costs in October.
The other two major carriers, Sprint and Verizon, have also expanded their no-contract offerings to some extent, and while Verizon, the largest carrier, would not comment on plans, Abbott and others predicted that 2014 might well become the year when buying a cellphone without a contract would become the norm.
The next two items are not so much updates as addenda. In an August column on getting inventions developed and marketed, several readers told me I should have mentioned Quirky.
Quirky.com began in 2009 to promote inventions and develop products. People can submit ideas free (unlike in its earlier days, when Quirky charged participants $10 a submission or $100 for a year of unlimited submissions). The site receives a few thousand invention idea submissions a week, and the Quirky “community” of about 600,000 members rates what they think are the best ideas.
Each Thursday night, the Quirky staff has a meeting — which can be watched live online — to evaluate the top 12 to 15 ideas, and then picks two or three to go through development.
The product is developed online. Members (also known as influencers) can help fine-tune the prototype by, for example, suggesting colors, design adjustments, names and logos. Quirky takes care of the patenting and legal issues, prototype production, manufacturing, packaging and marketing.
In exchange, Quirky takes 90 percent of gross revenue, with 4 percent going to the inventor and 6 percent going to those who offered substantial contributions, with a formula determining how to weigh the input of the contributors. The company was estimated to be worth $50 million in revenue at the end of 2013, said Tiffany Markofsky, a spokeswoman for Quirky.
Quirky products are packaged in a similar way, with a photo and the name of the inventor, and the number of influencers.
So far, about 140 products have been commercialized and sold, Markofsky said. Some have landed on the shelves of major stores like Target, Home Depot and Bed Bath & Beyond, and all are sold online at the company’s website. This spring the company announced a partnership with General Electric.
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Jake Zien, 24, who invented Quirky’s best-selling product, Pivot Power, said he had made about $500,000 in revenue over the past few years. Pivot Power, a flexible power strip that fits every size of plug and adapter, sells for $30.
Every inventor has to agree to the terms and conditions on the Quirky site when submitting an invention, which any prospective user would do well to read through carefully. I did search the Internet to see if there were complaints about Quirky.com from irate inventors and found very few — most who had commented on the experience said that the feedback could be rough but that the process was interesting.
Zien said that, even though he might have made more money if he had not gone through Quirky, the difficulty in getting a product developed, produced and marketed might well have meant that he would never have succeeded on his own. But he said, “Potential inventors have to realize the odds are against them and calibrate their expectations somewhat.”
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Finally, there is a follow-up to a column this month on options for older drivers besides turning in the car keys.
As I noted, only Illinois requires a road test for older drivers, although many states require that a driver older than 70 come in to renew a driver’s license rather than do it online or by mail.
Several readers suggested that it might be worth looking at how some other countries tackle the problem.
For example, in New South Wales in Australia, drivers 85 and older have to take a driving test every two years. Those older drivers, however, can choose not to take a road test and instead receive a modified license. The terms of the modified license are negotiated but typically limit travel, such as allowing only daylight driving or “home to town” trips. Drivers older than 75 years old also must submit an annual medical form filled out by a doctor.
In Ontario, Canada, when drivers turn 80, they are required to attend a 90-minute interactive group education session with topics including new traffic laws, how aging affects driving and tips for older drivers. They also must take a written test about the rules of the road. Those who have trouble understanding the written test or group discussion are asked to take a road test.
Interestingly, a study of Finland, which requires medical reviews starting at age 70, and neighboring Sweden, which licenses drivers for life with no mandated reviews, showed no difference in road safety between the two countries.
So, the work continues. Whether it be marketing existing products, inventing new ones or finding innovative ways to address continuing problems, the only certainty of next year is that there will always be more to say.