Subsidize customers, not phones
Submitted by brad on Wed, 2007-02-28 01:58As you may know, if you buy a cell phone today, you have to sign up for a 1 or 2 year contract, and you get a serious discount on the phone, often as much as $200. The stores that sell the phones get paid this subsidy when they sell to you, if you buy from a carrier you just get a discount. The subsidy phones are locked so you can't go and take them to another carrier, though typically you can get them unlocked for a modest fee either by the carrier or unlock shops.