Absolute horse-crap. Phones are one of the most arbitrarily priced pieces of hardware on the market.
Take for example the 'free phone' it is 'retailed' at 200 plus dollars. It has not touch screen, no wifi, no app store, no legit mobile browser.
When in reality, you could buy, for that same 200 bucks, a iTouch, which gives you applications, wi-fi internet, Texting, and a significantly larger screen (touch screen even). Hell, with Wi-Fi, as long as you have access to a router, you can run Skype and Call anyone, FOR FREE!
Hell for 200 bucks you can get a netbook!
Cell-Phones are a huge, dare I say, price-fix bonanza. Friggen Rip-offs.