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The True Cost of a Motorola Droid

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I have been looking forward to replacing my Blackberry 8830 World Edition for several months now. The phone, even with ample extended memory, is sluggish and does not have the same capabilities other modern phones have.

With the release of the Motorola Droid, I decided this was a good opportunity to upgrade. On my way home from work on Friday I stopped by the Verizon Wireless store, confirmed I was happy with the phone, and walked out of the store with my purchase including some accessories.

It was an expensive evening, but I’m happy with the purchase so far. The good news is I’ll be paying less per month for a while. But here’s a breakdown of what it would cost to own a Motorola Droid on Verizon Wireless.

The first thing you will notice is the price of the phone. If you start or re-start a two-year contract with Verizon Wireless, the phone costs $299.99 with a $100 rebate available. If you buy the phone in person, you will have to send in your receipt to receive the rebate in the form of a debit card, but if you buy the phone online, the rebate is instant. I also had my “New Every Two” rebate, reducing my cost by $50.

The phone comes with a regular charger but if you want a car charger, Verizon sells the necessary micro USB charger for $29.99 in the store but you can find less expensive options are available on Amazon.com. Verizon also wants you to buy a multimedia docking station. I did not find this necessary, but I did buy the car mount, $29.99 at the store. The navigation features on the Droid rival the best GPS devices, and the car mount makes those features convenient.

The cheapest monthly plan at Verizon Wireless is $39.99 for unlimited nighttime and weekend minutes and 450 anytime (any other time) minutes, but any “smartphone” requires a data plan in addition to the voice plan, so you’ll pay another $29.99. At this time, using the cell phone as a computer modem is not supported on the Droid. I did have “tethering” with the BlackBerry, so I will be saving $30 per month by canceling this feature until Verizon offers it on the Droid early next year.

Verizon Wireless wants to ensure that Droid users don’t abandon the network before the end of their contract. Phones are sold at a loss by the company with the expectation that they will make back the cost of the phone, and profit, through monthly fees. Full retail price of the phone is $559.99. To protect itself further, and to encourage customers to purchase sooner rather than later, on November 15 Verizon will be doubling the early termination fee on for Droid purchasers to $350 from $175. This fee drops by $10 every month of the contract, but it is still a gutsy move when early termination fees have already been judged illegal in California.

Total cost of owning a Motorola Droid on Verizon Wireless

Assuming you don’t go over your minute allowance, here is what buying a Droid could cost you.

Motorola Droid after $100 rebate $199.99
Car charger accessory (optional) $29.99
Car mounting accessory (optional) $29.99
24 months voice plan 450 minutes $959.76
24 months data plan $719.76
24 months 500 text msgs (optional) $240.00
18 months tethering (optional) $540.00
Total $2,719.49

You’ll pay more if you want more accessories, like the multimedia dock or a Bluetooth headset. Many of the applications you can install on the phone require a small fee, and some, like the visual voicemail app, disappointingly carry a monthly charge. However, Google Voice is a good, free option, and it integrates seamlessly with the Droid. There are many other useful apps that are free.

So far I like the Droid. It is a major improvement over the BlackBerry 8830. For those who like AT&T, check out the true cost of the iPhone 3G.

Photo credit: allaboutgeorge

Updated January 16, 2010 and originally published November 9, 2009. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 16 comments… read them below or add one }

avatar RainyDaySaver

It's amazing how much one little device can cost. I have Verizon as my carrier and was considering it, but I don't think I would use the Droid its fullest capability. I have your run-of-the-mill cell phone. I use it for texting and calls, mostly, but can get on the Internet if I need to. And as I'm almost always near a computer, it doesn't pay for me to have the data plan. Thanks for the breakdown, it confirmed that the Droid is not for me!

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avatar Eric

Hm I actually felt the GPS was LACKING…..but it might be just a matter of preference. Despite all of the hype of the phone's release, the local Verizon stores here didn't see people lining up. I wonder if it's still considered a successful launch elsewhere.

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avatar Luke Landes ♦127,386 (Platinum)

When I visited the store on Friday, the store was pretty busy, and everyone seemed to be at least interested in the Droid. I'm not sure how many walked out with one. The salesperson basically said, when asked about how Droid sales were going, “If you're visiting the store today, you're here to buy a Droid,” which didn't really give me any information. But he was busy trying to sell me a phone.

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avatar Walt Breuninger

The true cost of the Droid is $199. That's it. There's no reason to buy any of the accessories or the tethering.

As for the monthly plans, the alternative is not “no cell phone” the alternative, 99% of the time, is “another cell phone”, so you can't count the full price of the monthly bill in the cost of the Droid. At the most you're paying an extra $20 per month more vs the monthly cost of a “regular” (i.e. non-smartphone) device.

The truth is that you're paying $199 up front (instead of $0 for a cheaper phone) and maybe an extra $20 per month for the plan. That makes the total cost about $680 over 2 years.

And the same goes for the iPhone.

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avatar Luke Landes ♦127,386 (Platinum)

That's a legitimate analysis. You're looking at the cost to switch from one service to the Droid, a comparison between one situation and another. I'm just looking at the overall cost.

If I continue to pay less per month with the Droid than I was paying with the BlackBerry, you could say my cost of ownership is negative. I'm saving money in the new situation, or I will have when the savings outpace the cost of the initial outlay to buy the phone. But that doesn't reflect the fact that I do hand over money to Verizon frequently and significantly over the course of two years.

Both points of view are valid.

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avatar drparty

Or you could always just tether with PDAnet… been around for years. Depending on you data usage you'll be fine, if your planning on streaming hulu in the airport all day you'll probably want an official tether solution. For light usage PDAnet works wonders and saves tons of money on the tether package.

Here's how to get it working on the Droid:
http://hardforum.com/showthread.php?t=1467063

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avatar Luke Landes ♦127,386 (Platinum)

Thanks for the information on PDAnet. I heard about it the other day. It might be a great solution for tethering, I'll check it out.

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avatar Tim Anderson

I never like saying the true cost is based on a 2 year plan. You do know they offer 1 year contracts at significant discounts as well right?

Assuming you don’t go over your minute allowance, here is what buying a Droid could cost you.
Motorola Droid after $100 rebate $229.99
Car charger accessory (optional) $29.99
Car mounting accessory (optional) $29.99
12 months voice plan 450 minutes $479.88
12 months data plan $359.88
12 months 500 text msgs (optional) $120.00
12 months tethering (optional) $359.88
Total $1609.61

This will allow you to upgrade to the newest and latest phone just 10 months from your date of purchase (Verizon lets you extend your contract at “renew” prices 2 months before your contract is up. $30 (difference between a 1 and 2 year contract) for a full year choice is totally worth it to me.

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avatar Tim Anderson

I never like saying the true cost is based on a 2 year plan. You do know they offer 1 year contracts at significant discounts as well right?

Assuming you don’t go over your minute allowance, here is what buying a Droid could cost you.
Motorola Droid after $100 rebate $229.99
Car charger accessory (optional) $29.99
Car mounting accessory (optional) $29.99
12 months voice plan 450 minutes $479.88
12 months data plan $359.88
12 months 500 text msgs (optional) $120.00
12 months tethering (optional) $359.88
Total $1609.61

This will allow you to upgrade to the newest and latest phone just 10 months from your date of purchase (Verizon lets you extend your contract at “renew” prices 2 months before your contract is up. $30 (difference between a 1 and 2 year contract) for a full year choice is totally worth it to me.

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avatar Arkar

U didn’t put $35 activation fee or did not have to pay for it.

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avatar Luke Landes ♦127,386 (Platinum)

I didn’t pay an activation fee, most likely because I was renewing a contract. If they do want you to pay this fee, for example if you’re adding a line or a new customer, you might be able to get that waived with a little work.

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avatar arkar

Nice
Thanks for tip, I got verizon too but I am lookin at Tmobile unlimited plan as it is much cheaper. I just wish they have droid or droid eris over there.

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avatar Boo

Thinking about switching to the Droid so I stumbled upon this article. I am already a Verizon customer and I am probably going to pass on this phone for the time being. The cost benefit analysis just doens’t work for me.

While it would be “neat” to have some of the features the Droid offers I get the impression that the bill would really start adding up the more you want to utitlize the benefits of this phone. While internet access on a phone can be nice paying $30 extra for it per month seems like a waste when I pay a little more than that for my home access through AT&T which includes access at every Starbucks. Not to mention the plethora of locations that offer free access or very inexpensive access.

As far as the navigation features are concerned there are dozens of great portable navigation devices that you pay for once and all the services are included. I guess if you use your phone as you life line for everything a Droid makes sense but other than that it doesn’t seem worth it.

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avatar Kishore

All,

What is the exact price of a DROID in shop?

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avatar Art M.

Ya know, if you’re OK with going Verizon, you can get a Motorola Droid from Amazon for the OUTRAGEOUSLY low price of $19.99.

Yep. Twenty bucks will get you a Verizon Motorola Droid. You just have to be comfortable having a 2 year contract, or a 2 year extension to your existing contract.

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avatar Good Gord

Aside from the possible $35 activation fee, as arkar mentioned, there are also Taxes, Surcharges and Fees, including these two which, according to Verizon’s phone plan order page, add between 21.5% and 54.5% to your monthly bill:
* Tolls, taxes, surcharges and other fees, such as E911 and gross receipt charges, vary by market and as of February 1, 2011, add between 6% and 39% to your monthly bill and are in addition to your monthly access fees and airtime charges.
* Monthly Federal Universal Service Charge on interstate & international telecom charges (varies quarterly based on FCC rate) is 15.5% per line.
That’s an extra $528 to $1352 more over the 2 year contract.

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