Verizon Communications

$199 Smartphone Costing You More Than a $650 Phone Would?

If T-Mobile's Chief Marketing Officer, Cole Brodman, could change one thing about the mobile phone industry it would be making customers fork up more money for smartphones by doing away with carrier subsidies.

That's the gist of a blog post he wrote in March where he argued the current U.S. model , where popular devices like Apple's (NASDAQ:AAPL) iPhone cost just $199 with a two-year contract, has significant negative implications.  You see, that shiny new phone isn't really $199 at all.  And if you lost or broke one you'd realize that pretty quickly, as you'd have to pay $649 for a new one.  Your carrier gets a better deal, but still pays double your price at around $400, according to The Wall Street Journal.As much as the carriers love their customers, they're not doing this out of the kindness of their hearts, of course.  They make up the money down the line when you pay your bill each month for the following two years on your contract.  According to Brodman, customers don't realize ...

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