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Comment by nimrody | Hacker News Reader

This is probably the price with contract (i.e., it's subsidized by the carrier and the true cost is higher)

Nope. It's actually $33, also in developing countries nobody pays more than $0.01 for a phone on contract.

I'm from a developed country and I don't know anyone who pays for a phone on top of the contract price. It baffles me how in US people get a $50/month contract + they have to pay $200 for the phone. Crazy.

Huh? What country are you from then? Every country I know a bit about in this regards (which covers a sizable part of Europe) has 'get a cheaper contract but still get a more expensive phone by paying up front for a part of it' options.

Alright, I wasn't entirely clear - yes, you can get a cheaper contract and pay a bit upfront for the phone - but I don't know literally anyone who does that. At least in the UK since you can get pretty much any phone model for 30-35 pounds a month people just do that rather than get a 20 pounds/month contract and pay anything upfront for the phone.

Because the phones are $600? At $50/mo it would take an entire year to pay for just the phone before any revenue could be used for actual operator business.

Yeah. That's exactly how it works. Me and all my friends have top-models of different brands, and I don't know a single person who paid anything upfront. HTC One here - 30 pounds a month contract. Iphone 5S - 35 pounds a month contract. LG G3 - 28 pounds a month. All of these prices roughly translate into $50/month - so why would you pay anything upfront?? And just because a phone costs $600 on the retail market don't assume that operators pay anywhere near that.

Everyone I know just buys phones outright and is on giffgaff at around £12 a month... Different demographics I guess.

What do you do when you want to break the contract? I.e., after 6 months you decide to switch carrier? Now what?

On O2 you just pay off the phone, and then break the contract whenever you want. There is no early termination fee.

Just to drive gambiting's point home, here's EE's phone selection: http://shop.ee.co.uk/mobile-phones/pay-monthly/gallery

The nearest to the $200 upfront is the £150 upfront for the "iPhone 6 plus 128GB", although that's then about $100 a month. For the very latest top-end phone. All the others have tiny or zero upfront fees.

They have to pay the smallest possible amount, in my country $0.01 (not in US dollars, of course)

they try to milk it (and it appears to work)... there is always pre-paid-no-contract plans BYOD

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