Earlier quoted context omitted.
A contract was violated when these phones were unlocked. In return for a locked phone the buyer received a subsidy from AT&T on the cost of the hardware. I don't want people to violate contracts with me, why should I recognize someone as a hero just because I don't like the contract? To be absolutely clear, I don't like locked phones, either, so I always buy non-carrier-locked devices and it means I pay the full, uns…
Subsidy is when someone gives you money, cellphone contract is when you agree to pay back the $1000 handset in 12-24 hidden installments.
First, a subsidy can exist in many ways. It's not explicitly "when someone gives you money". It's often the case that phones are discounted through deals such as buy one get one (BOGO), for example. When you purchase those two phones they are tied to a contract that states you'll carry new lines of service through the carrier that subsidized the phones for a period of time. That's one example of a common US carrier subsidy.
Second is when costs of a phone are spread out over a contract period it is credit, not a subsidy. The carrier gives the phone to the buyer on credit since they haven't paid for it up front. This is often done now so people can buy phones they may not have the capital for up front. In this way the carrier lessens churn by locking buyers into a continuous upgrade cycle. If they want out of their contract they have to pay the balance of the phone and any early termination fees (ETFs). To imply these are "hidden installments" is disingenuous as the terms are laid out in the contract.