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Some fair points, but the VAST majority of iPhone buyers buy them on revolving phone credit plans tied to carrier contracts. It would be akin to subscribing to XBL or PSN for a period of 2 years and getting the console for $99, catch being you get hammered with massive fees or credit dings if you don't live up to the contract.

In fact, almost everyone I know is a slave to the big phone company treadmill, which is a horrendous waste of money overall. It's always better to pay cash for the phone and get a better deal on service. I get unlimited everything + 4G for $25/mo, I just pay cash for my phones :)