European carriers -- operating in a more mature market than their American counterparts -- have long since figured this out, and have completely turned the subsidy model on its end. You can get virtually whatever phone you want for free, from the lowest of the low to the highest of the high -- the only difference is the required minimum monthly spend. It makes a lot of sense considering that carriers don't make money off your phone purchase, they make it off your plan -- it's not pure gravy for them, but it's close enough so that they're comfortable deeply subsidizing your hardware. Besides, higher-end phones have been proven to generate higher ARPU (average revenue per user), which only serves to validate the model further.
So, Verizon, AT&T, Sprint, T-Mobile, that's really all there is to it: crib off your European cousins. There's never been a better time, what with the boys and girls in Washington bearing down. Stop trying to play the pricing game from the moment a potential customer walks into the store, because it's only going to get harder -- and rest assured, the days of selling $500 clamshells on contract are definitely over.
