Google's Nexus One 'equipment recovery fee' slashed to $150, still a pain
By Chris Ziegler 
posted February 8th 2010 5:05PM
posted February 8th 2010 5:05PM
So the good news here is that Google appears to have heard the cries for help, having taken a chainsaw to its brutal $350 "equipment recovery fee" that had been lumped on top of T-Mobile's $200 ETF for subsidized Nexus One contracts canceled in the first 120 days. The bad news, though, is that it still exists at all -- a hairy precedent for an industry being watched with eagle eyes by the FCC right now. The company has knocked $200 off the fee, bringing it down to $150; in other words, if you break your contract, you'll pay the same ETF that Verizon now charges on its "advanced devices." Whether that was a deliberate move to let 'em say that they're no more expensive than Verizon is unclear, but let's be honest: $350 is extreme, $550 was highway robbery. At least we're going in the right direction.
@all4lessmedia
Lol @ your "Google Android" specs:
*ARM9 processor, 208MHz system clock
*High-Res TFT display, 240 X 320 dots resolution with
2.8 inch Touch Screen
Sell your garbage somewhere else, it isn't going to fly here.
Still good to see Google constantly actively improving this, multitouch, this discount etc...
@Almo Yes, they seem to be very proactive in resolving the issues with this device, I'm starting to think that Google getting into the smart phone game is gonna be great for comsumers
@Almo Trust me, this is not a discount.
@Edobe
Just wish they allowed more consumers to buy the device. Don't know if it's a T-Mobile thing or Google but they could have sold way more.
@Almo - what I am hoping for is $200 off the price of the phone, and a simpler way to actually get it. I want to feel it in my hands before I buy, and not be penalized if I don't like it.
put it in tmo stores so people can grope it !
@MykeSaint
I'm not sure I follow you. The Nexus One is quite literally one of the easiest mobile phones to buy. Google.com/phone. Straight up.
@POZ - I was a little worried about spending so much cash on a phone I had never handled either, but I'm sooo happy I made the jump. I think if you watch all the videos made about the Nexus One (they've all been posted on Engadget), and couple that with the opinions of owners, you'll feel more comfortable knowing the device is truly top-notch. Trust me, you won't regret purchasing it.
@Almo testing
@Almo
Wow, Google has it pretty easy. All they have to do to have their ridiculous fees accepted is to introduce them at ridiculous(x), then subsequently slash.
@Almo
well lets look at the math here
Nexus One with no contract: $530
Nexus One with contract: $170
Nexus One with contract and cancellation fee: $370
now $370 + $150 recovery = $520
So if they didn't have that fee, they would be out a lot of money. And it bring in people to scam the system.
@Almo Hopefully they actively improve that screen to 4.3"
@corylulu T-Mobile charges an ETF on top of the Equipment Recovery Fee. They were double dipping.
@Almo Yes, Apparently, we do have a rebate before with the N1, Explaining it simpler: http://bit.ly/nexus-one-rebate-details
Indeed it always sound good to hear G, improving the capabilities of the nexus phone.
@coolbho3000
actually, corylulu included the ETF:
"Nexus One with contract and cancellation fee: $370"
That's $150 plus tmo's $200 ETF. The math seems right to me and makes a great point. People would definitely scam the system without that recovery fee.
@daaper
sorry, $170 plus the $200 ETF, not $150.
I have no issue with carriers setting ETFs at whatever they want as long as I have the option to buy and use any phone I want outright and have contract-free service.
these etf's from Google really don't fit with the whole "Don't be evil" thing. Why would Google need an etf on top of T-Mobile's?
@spade
I'm going to speculate that it's because if the T Mobile ETF is only $200, then if you just pay for one month and cancel the contract, you'd have the phone for less than if you bought it unlocked, in which case they're losing money. Although of course they're most likely actually still making money, but not as much as they want/need to cover the costs of R&D and still make a profit or whatever..
I don't understand the big deal? There are plenty phones that cost more than $500+. You should know within two weeks if you like a phone or not? right?
$179 + $200 t-mob ETF + $150 google ERF = $529 origianl cost, seems fair, no?
@nothing Not fair at all, look at the hardware cost: http://www.engadget.com/2010/01/09/nexus-one-hardware-costs-174-15-us-multitouch-still-priceless/
So why would both Google and T-Mobile require money back when either one is plenty when you figure in that the consumer already covered the cost of the phone.
@spade
I thought production, shipping , testing and all that other crap is why they charged after the 14 days?
@spade
You are pointing out the "cost". But really, @nothing's point was valid as the comparison should be made to the "price" -- one shouldn't be able to pay less by intentionally signing up with a subsidized phone and immediately cancelling.
@MykeSaint Oh yah... All that OTHER crap, but still it is an incredibly costly fee.
@spade
But the phone itself COSTS $529, not $174. There are other things that go into offering a phone to the public than just hardware.
Either way, his point was valid that this is pretty fair. Why should people get off with paying less for the subsidized and canceling, whereas those who bought it unsubsidized still have to pay full price? All the ETFs between the two companies are doing is recovering the full cost of the phone.
@spade
So I guess actually building the phone, testing to make sure it worked properly, and doesn't break when you press it to your ear was all free, huh? Not to mention the fact that the advertising for the phone and developing a whole new way of selling phones was just pro bono.
Hardware cost tells you little to nothing. Either way, they are a business. They ARE in this to make money. If the phone is too expensive for you, don't buy it. Simple economics.
@spade
if that's your argument, you should be upset with the unlocked retail price.
if you knew what the markup in furniture is, you'd never buy a folding chair again.
How is this highway robbery. Your paying the full price of the phone with no contract.
YOU + ARE = YOU'RE
I reaaaaaaaaally want one but godamm google wont release it in spain and I simply cannot afford to buy one of the net for 600 I need a plan :(
@MoonWalkerCTE agreed! just bring it to europe! :P My phone plan is running out this summer, so, I hope I can get this phone. :)
@MoonWalkerCTE
And Canada, please. :)
I don't understand the issue now, if you purchase a subsidized phone (Nexus One) at a discounted rate ($179 vs $529) and cancel before your contract is up, you *should* have to pay the difference between the subsidized and the unsubsidized price.
With the old pricing you were paying much MUCH more than the unlocked price of the N1, now it matches up exactly. Take these two examples:
User 1 purchases an unlocked Nexus One for $529, and is under no contract.
User 2 purchases a subsidized Nexus One for $179, then cancels T-Mobile service after one month leaving him with no contract. User pays $200 to T-Mobile and $150 to Google, totaling $350. Add in the upfront price of the subsidized N1 ($179) and you come to a grand total of $529, the exact price of the unlocked model.
This model makes sense and is perfectly fair IMO.
@Philmatic If I'm understanding this correctly you won't have to pay the full $150 if you give the phone back also right? Just the restocking fee and you're done.
There keeping their ears open. HUM
THEY + ARE = THEY'RE
And I thought my iphone $175 fees was expensive. This news just tempted me more to get the Nexus.
It's still ridiculous. The carriers say their ETF is only to recoup the money they pay to subsidies handheld costs. Google says their ETF is because if you cancel within three months, they don't get their money. So if they aren't getting paid by the carrier, why would T-Mobile need to recoup anything.
One of them is lying, or the ETFs are there to lock in customers and stifle choice after all.
@JoshUng
Exactly. How the hell is T-Mobile getting away with an ETF when you don't even buy the phone from them?
If T-Mobile is paying Google the sub. fees, how in the hell is Google getting away with their ETF?
Unless there is a time limit? I'm sure T-Mobile is like a 2 year contract but does Google have a time limit on it?
the only thing that irks me is that tmobile charges an etf for equipment recovery... And google does the same. It SHOULD just be $350 for either tmobile OR google and that's it. Unless tmobile is spotting you $200 and google is spotting you $150 seperately
That's not a fee... it's an outright SCAM.
No other words can be used to describe it. $150 for what exactly? For restocking your product if someone returns it? That's like a 25% restocking fee!
I can semi understand T-Mobile's ETF (even if it is excessive), since they are the ones that have to deal with changing our your number and the billing information and all that other paperwork since it is their network after all, but even then that can't be more than a few minutes worth of work on their part.
@Hazdaz 179 + 200 + 150 = 529 OR the amount the phone costs without a contract. How are you confused by this?
@TheGM He's confused because he doesn't understand this whole "subsidy" thing.
In his world, even high-end phones are worth no more than $179 and people who pay $350 more just for some nebulous "unlocking" are chumps who should be mocked roundly.
@Hazdaz, the point is that the phone has a 14-day return period. After that, it isn't returnable. If you bought the phone at a discount and cancel your mobile contract, then you need to pay the discount back. Again, if you buy the phone outright, it is $529. If you buy it with a contract, it is $179. If you cancel your mobile contract after the return period, then you need to pay Google the $350 discount back that they gave you when you signed up for the mobile contract.
Well im gonna assume that if they plan on bringing this product to verzion i doubt verzion would have them charge that ridiculous fee after seeing all the negative press both tmobile and google got for it. So it might be some pressuring from verzion side to bring it back to a realistic fee such as what they currently charge (my opinion)
I agree the google fees are crazy, They really need to explain where those fees are coming from and good Job to the FCC for looking into it.
@Hydra I just don't see where people are confused. The cost of the subsidized phone plus the fees exactly equals the cost of the phone without contract.
Sounds very fair to me.
You guys have it easy for non-Nexus one contracts lol.
We in Canada have $400ETF + $100 Data ETF...so $500+13% tax to cancel a contract.
And that's for all phones. What the $100 Data ETF is for? It's for terminating data plan, which you need to sign up for 3 years in order to get subsidy on phone.
And our contracts here are 36 months instead of usual 24, lol.
The real problem with this whole thing, that most people don't seem to realize (because apparently most of you don't have family plans) is that Google, and not T-Mobile, decides who is eligible for the discounted price for upgrading the phone on your line.
I am on a Family plan, and meet T-Mobiles requirements for a phone upgrade on my line. For example, I could upgrade to a MyTouch 3G for only ~$179. IF T-Mobile sold the Nexus One, I could do something similar, but since Google only allows specific Single Plans to upgrade, myself and many other T-Mobile users are being locked out of this.
T-Mobile has been more than willing to help their customers "cheat" the system in many reports I've read, and from experience they've showed a general interest in helping my family and I save money where we can. For example, T-Mobile is perfectly okay with temporarily transfering a single line on our Family Plan over to a Single Plan, let us buy the phone (for the discounted $279), and then switch back over with NO CHARGE. But this "Equipment Recovory Fee" is a way for Google (and NOT T-Mobile!) to force those on said other plans to "pay the full price".
My point here, and why I'm so frustrated with Google, is that T-Mobile is more than willing to let us upgrade the phone on one of the lines of our Family Plan for a much cheaper fee, and Google is making sure that T-Mobile has no such control over discounts like this. Thus, a lot of long time T-Mobile members (who, honestly, have been nothing but pleased with T-Mobile's helpful and generous customer service) are peeved at Google for, essentially, cheating us out of benefits T-Mobile is trying to give it's loyal customers.
The good news is: With this lowered fee a T-Mobile Family Plan member can now temporarily switch a line over to a Single Plan, buy the phone for $279, switch it back over, eat the $150 "Equipment BS Fee", and get the phone for $429. It's still not what T-Mobile would give us if they had control, but it IS cheaper. Hopefully this is a sign of things to come, and Family Plan members will soon be extended the full discount. Either way, I'm very displeased with Google's approach to all of this.