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> or to get a huge discount And that's the problem right there. Americans thinking they are actually getting a "huge discount" or subsidy. You are not. You're

> or to get a huge discount And that's the problem right there. Americans thinking they are actually getting a "huge discount" or subsidy. You are not. You're only paying the phone in monthly payments. That's it. If anything they get more money from you buying it with this "discount" than they would if you would buy it upfront. At least I think that was the case before. Now T-mobile forced all to adopt a transparent monthly payment plan for all phones, so you can easily do the math yourself to see if buying it through monthly rates is more expensive or not than paying full price upfront. Anyway, bottom line is you're not getting a discount or subsidy.

mikeash 12y ago
It depends on the carrier and the plans they offer. This is changing, but a few years ago the situation was that you could get a $400 discount on your smartphone in exchange for a two-year contract for (say) $70/month service, or you could pay full price up front for your smartphone and get a month-to-month contract for $70/month. The cost of service didn't change, all that changed was lock-in. That was a subsidy. If you were willing to be locked in for two years, you'd pay $400 less for the phone+service combination. Now, most carriers charge you more if you buy a "subsidized" phone, so it's a clear choice between paying more up front or paying more over time.