Then it breaks. And since the software is usually so crappy on it, there's no consistent way for them to have backed it up. Sometimes the contacts are on the SIM card--sometimes not. Sometimes they've backed up to the Google cloud; sometimes they didn't understand what that was, so they just hit "skip" when it asked them to set up that account.
So when that phone breaks, they've lost EVERYTHING. Now I know there are some folks on HN, because I've been around here long enough, who would say "They should just learn how to back it up!" And to that I would say, who is teaching them? Can you? These people are sometimes barely literate, often only with a high school education (or less.) We can't expect them to understand what a "Google cloud" is. And heck, even as technical people, many of us don't back up stuff properly, especially personal items.
So when that phone breaks, they've lost a lot. Personal photos of their kids. Important contacts. The calendar that reminded them where that job interview next week was.
Many of these same folks would be far better served buying a used iPhone 4S, which is $55 to fix when a screen breaks. But the difference between $50 for a Cricket HTC Desire and a $100 iPhone 4 could be a week or two--a week or two during which they cannot survive without their phone. That's why I say it's a disgusting market.