Sure, sure, but if the difference between a basic phone and smartphone is $99-$0, why would anyone get the cheaper phone? $99 is basically free too. I'm saying that it seems like the market should be so compressed that smartphones become overrepresented and the market for cheaper phones dies.

The reason cheap phones are popular here is that the difference is 500e-50e, which is a much, much wider price range.

The second paragraph was about how, if people actually buy the free phones regardless of this, they must understand the real price of the contract, or the $99 smartphone would always make more sense. This is regardless of whether they're unlocked or not.

Actually, I should have mentioned that smartphones can also require additional services which add additional charges to the monthly bill. For example, as AT&T notes: "Please note: Data plan for iPhone is required for the life of your iPhone service and cannot be removed in the future." Their data plan costs $30 per month on top of the minimum $40 per month voice plan and you have to sign a two year contract.

Therefore, if I'm looking for cheap service I will go with a cheap phone to avoid additional service charges, as well as because the phone is cheaper in the first place.

One other thing, the cheapest service is a prepaid plan but most carriers don't even offer data service with a prepaid plan which defeats the purpose of a smartphone.

Judging from the conversations I hear at work, at family gatherings, and in public, it's because $99 is widely considered a ridiculously large amount of money to spend on a phone. Phones are free, and it seems as though anyone paying...well, paying at all feels they need explain their foolish behaviour. "Actually, I, umm, had to pay $39 dollars for this one. I know! I just really liked the color."

The iPhone and Blackberries are the exceptions to this. Of course you paid something. They're iPhones and Blackberries. Besides, it's high time you replaced that pink Razr that it was fully acceptable for you to pay money for years ago.

Between the American carriers and the American consumers, it's no surprise Nokia keeps away.