If that's how most people are making their purchasing decisions, then may god help us all. The reality is you have an iPhone for $650, and now you have a "budget" option for $550. Or with contract something like $2400 vs. $2500.
How do you think they should make their purchase decisions, based on things they don't expect or want the device to do?
I wouldn't compare the contract prices at all - that's very contradictory to the whole notion of credit and why it's so successful, people see what's required up front as the down payment and that's how they judge the price.