To extend this to your analogy, I was forced to take out a mortgage despite having the cash to buy the whole house outright because the person selling the house wouldn't take cash.
Verizon (and most of US) uses a competing "standard" called CDMA, where your identity is coupled to your phone. Which means you have to involve your phone company in order to switch phone.
Verizon and Sprint use CDMA. AT&T and T-Mobile use GSM. The frequencies that T-Mobile uses are non-standard, IIRC.
AT&T => 107.3M
Verizon => 116.8M
T-Mobile => 44M
Sprint => 64.3M
Anyhow my point is I have no problems adding a personal device to my plan anytime - many times.
And that's a pretty good reason not to go for Verizon. It's not that you don't have a choice.
I am with t-mobile ever since I remember, just because I refuse to give my money to AT&T or Verizon (and also to Sprint as they are CDMA).
It's your money, and it's your decision.
Consider how much different things would be if people had month-to-month service contracts and they financed their phone upgrades separately (though the payments were rolled together). Imagine if people could just pay off their device debt, cancel their contract, and move to a new carrier. Or imagine if people could pay off their device debt in advance to avoid the interest payments. Or imagine if people could roll their old device debt into a new loan for a new device, and then carry that forward. It's funny how a phone company will give you $500 in financing for a new phone no problem but they outright refuse to give you $550 or $600.
I imagine most consumers would probably prefer a more transparent system like this, but the problem is that then they would see how much they are getting shafted. People are locking themselves in to $2k commitments when in reality they should only be committed to $500. Sure there's also service attached but a lot of people don't use a lot of cell data or make many phone calls. Most people could probably get buy on the cheapest virgin mobile plan, for example, which is just $35/mo.
So let's do the math. People who are locked into phone contracts due to their device upgrades are locked into about $1150 of extra payments. That works out to an effective APR right around 99.8%!
It's no wonder that phone companies like things the way they are, confusing and complicated. It allows them to charge usurious interest rates on device purchases without their customers fully realizing.
Straight talk monthly plans (bought 3 months ahead, service has been great so far) + nexus 4 with an ATT sim.
$45/month for the unlimited plan, $200 for the phone.
This is at the of the US market conundrum. There are enough options for people not to go for the big two. They cost more money, they give less freedom and still people flock to them. I just don't get it.
In contrast, if you do the analogous thing with a cell phone plan -- buy the phone upfront -- you still have to pay the implicit "interest" in the higher monthly fee. There's no option to take a lower monthly fee in return for paying upfront.
Some marketers noticed they can make people buy more if they stretch out the phone payment over 18 months and add it to the phone bill -- good!
They denied everyone else the option to save money over the long term -- not good.
Actually, with T-Mobile (the company in this story) you DO have this option. http://www.t-mobile.com/bring-your-own-phone.html
If two people owned all of the houses in your city and colluded on pricing, types of houses available and only did business with their bank — then your comparison would be true.
I believe there was a case a few years back where it was even specifically held that this invalidated a mobile phone contract because the woman couldn't predict the future as well as the phone company.