You really think people here are too dumb to understand that the phone company is adding enough to the contract price to cover the $687 they paid for that phone?
That’s been their business model for as long as I can remember ... :-) ...
And you think people are too dumb to realize that no matter WHAT phone they get, they will be paying for it somehow? it matters not whether it;s a Samsung, Sony Ericsson, LG, Nokia, or Apple. Someone has to pay the freight. If you pay $199 for a flagship phone, why not get the best? Why not get one that will have a large resale value two years from now when it's time to trade up? Right now, the ONLY cell phones that have any value in two years are Apple iPhones. . . and they generally have MORE trade in or resale value than the $199 or $299 you may have paid to initiate the contract renewal! That simply does not happen with two year old Android junk. No one wants them. TANSTAAFL
That's how they are able to move hundreds of millions of devices and make them affordable for just about anybody.
The average cell phone bill is around $80/month. Over a typical two year contract, that comes out to about $2,000. Most people pay between $99 and $199 for a phone with a 2-year contract so it is fairly easy to bake the rest of the cost on the phone into that contract.
That's how most salespeople sell cars by the way. They focus on the "monthly payment" that the customer can afford and the down payment they can make. That is what makes it possible for your average Joe to go to the car lot and drive away in a brand new car that day.
If car dealerships required full payment up front for their cars, well, they wouldn't sell very many cars.
As another poster stated, a smartphone is a very sophisticated device. It's a powerful computer that is miniaturized to fit into your shirt pocket. It's not cheap to make them but by way of the 2-year plan, just about all of us can afford to buy them. That's not a bad thing.