Not breaking news: Smartphone subsidies are just a fact of modern life


Today's Best Tech Deals

Picked by Macworld's Editors

Top Deals On Great Products

Picked by Techconnect's Editors

Hey, you all know how phone “subsidies” work, right? You pay a reduced up-front charge for the phone so they can rope you into a contract, blah, blah, blah. That’s not surprising in 2014, is it?

It used to be surprising. Here’s the Macalope, five years ago when AT&T customers were first figuring this out:

[It] isn’t a “subsidy” by the traditional definition. It’s a loan. AT&T is loaning you the money to buy an iPhone and you’re signing a contract to pay it off over the next 18 months. If you decide you want out of your loan, you have to pay a buyout.

Apparently, however, this newsflash from 2009 is shocking, and possibly Pulitzer-potential material to the New York Times. Because Apple.

“$199 Apple iPhone 6 Is Fiction, if Not Fantasy” (tip o' the antlers to @JonyIveParody)

Is it? Or is it... magic?!

(It is not magic.)

If, like me, you watched Apple’s self-referential love fest...

Oh, for the love of...

Apple held an event to launch its new phones and announce a watch. And in this event, it talked about itself a lot. Which is apparently très gauche to the Times’ Jeff Sommer. They really should have discussed the works of Wittgenstein before allowing their competitors up to announce some of their products. That would have been more Emily Post.

...for the new iPhone and suddenly wanted one very badly, you may have been encouraged by the way the price was listed: “From $199.”


It turns out that upgrading an iPhone every two years on a 24-month phone service contract, as I’ve been doing, doesn’t cost $199. This year it will cost me at least $649.

Yes. That's right. Welcome to 2009.

The information you need to figure out the real price exists on the Apple website and on the sites of the various major phone carriers. But often it’s not easy to find the numbers or to calculate them.

Yes, Apple doesn’t shove the full number in front of you. Instead it puts in a footnote that says a contract is needed. It is the kind of obfuscation typical of the cell phone business, car dealerships, and insurance. It’s not Apple’s usual modus operandi, it’s not great, but it’s also been around for more than five years. Did the Macalope mention that part?

OK, now that the slower students who write for the New York Fricking Times are with the rest of us, just for grins, let’s go see how Samsung’s devices are listed. Samsung itself doesn’t even show the price on the Galaxy Note 4’s page, but on AT&T's page for it, they do have the full price of $825.99 shown in small numbers before the GIANT $299.99 PRICE. But here’s what it says next to the difference of -$526.00:

Instant Savings with Contract

“Instant Savings”?! What “savings”? There’s no “savings” here. Does that sound like a cell phone company? Offering customers a savings?

Now let’s check out the Nokia Lumia 1320. Oh, that’s “Starting from $279.99,” without any footnote on the page that lists all the phones. On the page for that device it says it requires a monthly service plan.

Is this typical cell phone market shenanigans? Yes, it is. Is it news? Not unless PLANE MAKES EMERGENCY LANDING IN THE HUDSON RIVER is too.

Note: When you purchase something after clicking links in our articles, we may earn a small commission. Read our affiliate link policy for more details.
Shop Tech Products at Amazon