Question

In the case of cellular phones, the physical product is practically given away to gain the phone services contract. This could be because

a) cellular phone companies do not view market share as a strategic goal.
b) the cost of production of cellular phones is very low.
c) the revenues from associated services exceed the revenues from the cellular phones.
d) the margins on after-sales services for cellular phones is low.
d) consumers sometimes buy a variety of services that are not associated with products.

Answer 1

Cellular phone companies offer discounted or free phones to gain phone services contracts and generate revenue from associated services that exceed the revenue from the phones themselves.

Step-by-step explanation:

In the case of cellular phones, the physical product is practically given away to gain the phone services contract. This is because the revenues from associated services exceed the revenues from the cellular phones. Cellular phone companies offer discounted or free phones in order to attract customers and generate revenue from monthly plans, data usage, and additional services.