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Comment Re:It would be fair... (Score 1) 475

There's nothing preventing you from buying a phone at the unsubsidized price and then modifying it. You're making a deal with the cell phone provider: You agree that you'll honor the contract you signed, and they give you a phone at a discount. Hopefully this is going to be a bit easier over time as everyones moves to LTE (does this mean that CDMA finally bites the dust?) and phones become standardized like the rest of the civilized world.

If that were true, then why is the cell phone contract not lower if I bring my own phone, since there is no subsidy? One could argue that the the price they offer the phone to the customer is not a subsidized price, but simply the market price. If they could charge more for the phone, they would, but the market won't bear it, so they can't. It has nothing to do with a subsidy, but instead is more like a loss leader, where the grocery store agrees to take a loss on Pepsi, to get people into the store to buy other goods.

They can call it a subsidy, but that is just marketing speak.

Isn't the phone "subsidized" by them selling other companies the rights to be included on their ROM and their ability to lock out certain features? On an unlocked phone they can't disable Google Wallet, charge you extra to enable the Wi-Fi hotspot, or guarantee AT&T Navigation will constantly present itself as a nav handling option. Even if you buy the phone from them, without a contract they can't guarantee how long they could deliver you as a captive consumer (or be entitled to the contract break fee). Also if you buy the unlocked phone from anybody else, you paid the extra money to party A instead of the cell phone carrier and they haven't replaced their revenue stream from locking down your apps and features.

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