Connecting with your cell phone

Prepayment can keep a lid on tempting cell phone use.

KAI RYSSDAL: Apple and Cisco say they're ready to make nice over the name "iPhone." Apple's latest gadget is coming out this summer. One problem, though: Cisco already has the iPhone trademark. So after some nasty words in court, the two companies made a deal this week. Now, both of them will be able to use the name.

But buying any cell phone remains one of the most complicated transactions you can think of. Maybe it's no surpise a hundred million Americans still don't have one, then. Marketplace's Sean Cole found one of the "unconnected" right here in our own studios.

SEAN COLE: His name is Chris Clarke. As in . . .

KAI RYSSDAL: Our engineers include Ravi Carman, Chris Clarke, Stephen . . .

That's right: he's one of the engineers her. Working with state of the art radio technology. And yet . . . he doesn't own a cell phone.

CHRIS CLARKE: No, I don't.

COLE: Do you want a cell phone?

CLARKE: . . . Not particularly.

But he's starting to think he might need a cell phone for those few occasions when his car breaks down or he's late coming home.

COLE: Would you use it to take pictures?

CLARKE: Ah . . . yeah, that might come in handy. Basically a phone would just be a phone for me.

COLE: Would you use it to solve crimes?

CLARKE: To solve crimes?

That's a yes. Plus, there's the little matter of how much he wants to spend.

CLARKE: My current thinking is that a pay-as-you-go type plan that you can, you know, charge it up with minutes and then just do it that way.

COLE: Well what I'm gonna do is I'm gonna go away. I'm gonna find out a bunch of stuff. I'm gonna come back and see what you think.

CLARKE: OK, sounds good.

COLE: OK.

COLE: Hi Joleo, how are you?

JOELO MONSALUD: OK.

I started at united mobile phones in Los Angeles, one of the few cell phone dealers in the city that offers plans from a lot of different carriers. The salesman's name was Joelo Monsalud.

MONSALUD: This is Verizon, this is T-Mobile . . . this is Sprint and Nextel . . .

The quote / unquote "low-end" phones are $99. High-end PDA phones can run as much as 500, plus they have those cool Sidekick phones with the little keyboards.

MONSALUD: These are the sidekick phones, usually for text messaging for teenagers.

COLE: And uh . . . what was that? Oh, that was your phone!

A high-end Motorola he got when he signed a contract with Verizon two years ago. He hasn't bothered upgrading it yet. Now, United Mobile will give you a free low-end phone if you sign a $40-a-month contract for two years. Anything cheaper -- including pay-as-you-go -- no free phone. And Joleo tries to sway customers away from pay-as-you-go plans anyway.

MONSALUD: Because we get more commissions if they sign a contract. So we could probably convince him or her to sign the lowest plan.

T-Mobile: 30 bucks a month, 300 minutes, unlimited weekends.

COLE: Do a lot of people go that route?

MONSALUD: Um, usually no. Because once we convince him to like, sign a contract, now he changes his mind and wants the fancier phone.

Still, in Joelo's experience, it's hard to get people to sign a contract in the first place. And Delly Tamer says that's probably not going to change any time soon.

DELLY TAMER: I think pre-paid plans, or pay-as-you-go plans, are going to escalate in popularity in the next year or two.

Tamer is the CEO of letstalk.com. It's a consumer information site about cell phones and plans. But they also . . . sell . . . phones and plans.

TAMER: Two years ago, only ugly phones were sold, really, with pay-as-you-go-plans. All of a sudden, you can almost get any phone you want now with pre-paid plans. Carriers have really woken up and said, "Wow, not everybody wants a contract."

So in the last year, he says, pay-as-you-go minutes have dropped 25 percent in price. Tamer says this is the kind of thing first-time cell phone buyers like Chris Clarke need to know before they make a decision. If you do enter a contract, he says, you should get a plan with way more minutes than you think you need to prevent overage fees.

And then, there's the soul-searchy part.

TAMER: Look deeply at cell phones and try to see what cell phone will fit your lifestyle the best.

Which is advice I wish I'd heard before I let my carrier talk me into getting this pimped-out phone that does video and web-browsing and all this stuff I never use it for. Free with a three-year contract, they said.

THE SPEAKER PHONE COMES IN HANDY THOUGH.

TOM KLEIN: Sean.

COLE: Tom.

I used it to call Tom Klein of phonedog.com. They do news and comparison guides. He says cell companies will usually push a free phone on you because they have a surplus of that phone. Or because . . .

KLEIN: All U.S. carriers are looking to gain a larger proportion of their revenue from other services other than the typical voice communication call.

COLE: I see, so they want people to buy the pimped-out phones because then when they download a video or a song or whatever, that's extra revenue for the carrier.

KLEIN: Absolutely.

And of course, just because you get a $300 phone for free when you sign up, doesn't mean they'll replace it for free when you drop it in the lake.

I brought all of this information back to Chris Clarke. He said . . . he needed to take a harder look at whether he really needed a phone.

CLARKE: And considering that all these plans and numbers and things are making my brain hurt, I don't think . . . I don't think I do.

But he's gonna think about it some more. And considering his wife might get one too, there's a chance they'll go with a family plan. Which would mean even more options to weigh.

COLE: Anything else, any big take-away from all this?

CLARKE: Do the research. 'Cause with the variety of plans and such, you're liable to get one that's not for you. I've been enlightened.

COLE: Ahhhhh!

CLARKE: (Laughs) Cue the angelic music.

Making everyone's life incredibly wonderful, I'm Sean Cole for Marketplace Money.

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