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Why CE Prices Always Go Down

Everyone in this industry who I have spoken to in my career covering CE has always complained about ever-lower prices and margins.

They all point fingers at some other company and wring their hands. It’s like complaining about the weather, but as the old adage goes, no one can do anything about it.

Well, now I’ll point a finger, not that it will do much good either: an industry that is far worse off than CE, the garment business, is using this industry’s products to get store traffic … with the help of CE suppliers!

The Wall Street Journal reported yesterday that from July 21 to Aug. 3 at American Eagle stores customers who try on a new pair of jeans will receive an instruction card directing them to a website to select one of dozens of free (my emphasis) phones, including the BlackBerry Bold, the Motorola Backflip and the HTC Aria — provided they agree to a two-year contract with either AT&T, Sprint-Nextel, T-Mobile or Verizon Wireless. The new device will be shipped to the customer along with a $25 American Eagle gift card.

Now it’s bad enough when mass merchants, with the cooperation of certain suppliers, entice consumers into their stores with discounted CE so they can buy diapers, mayonnaise or blenders, and worse when car dealers offer nameless MP3 players or compact camcorders for free if they come in for a test drive, but for brand-name handset makers and carriers to allow this to happen is ridiculous.

Let’s hope this type of “promotion” isn’t catching. What do you think? Let us know.