Earlier quoted context omitted.
I always wonder, how can you U.S. guys tolerate this stupid carrier lock-in with year-long contracts? When in other parts of the world they are planning or already have laws obliging carriers to provide call forwarding to your new number after you switch away.
It's happening in Europe too, and I don't see the big problem. It's what makes it economically possible for carriers to offer a subsidized up-front price on the phone. You're free to buy the much more expensive unlocked phone, even in the US, on apple.com, no?
Why did subsidy catch on for describing contract phones?
I'm pretty sure the carrier is making a nice big profit on the loan, making subsidy a terrible word choice.
I suppose many of the cheap prepaid phones actually are subsidized though.