Well, the interesting thing is that in Europe the tablet and iPhone are more comparable because there's a much bigger market here for buying phones unlocked at full cost.

A lot of Europeans buy phones just like any other gadget, they pay the full price up front without a contract, and then pay less for the actual phone service because they don't have to pay for hardware. It's very much like buying a PC and subscribing to an ISP, two separate purchases.

This is why I'm so interested in finding out what the new iPhone actually costs on its own, especially as other smartphone prices have been dropping over the past year.

Some smartphones really are $199 unlocked and without a contract, so the market is getting very competitive indeed. I wouldn't be surprised to see the entire phone market be made up of smartphones in 5 years time.