Is it not like this for other smartphones? You're still paying the high price to Apple.
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If phone companies stop subsidizing smartphones, Apple stock price will drop like a rock. However Samsung will be doing fine, it can still sell white appliances, TVs, and others. Samsung is a conglomerate, not Apple.
http://en.wikipedia.org/wiki/Samsung
Subsidized smartphone should be stopped, because it puts consumers to a perpetual phone update cycle, generates more e-junks to landfill. Right now consumers have no choice, they either take an overpaid cell phone plan or pay perpetual downpayment for phone upgrade cycle.