That said, it still blows me away when I see my friends taking these "subsidies" without understanding that they are basically paying full price for the phone, if not more.
Where I live there is very high competition in the mobile carrier market, and subscriptions are incredibly cheap.
I'm always amazed at how many are actually throwing away money by accepting a 'subsidied' phone which forces you to take a contract 2-3 times as expensive as you would actually need it.
Even if you see it as 0% financing, in my quick calculations it always worked out to be more expensive than just buying the phone outright.
Here in Canada, prices are not cheap yet, but getting better slowly due to increasing competition. What I see is that the subsidized plan makes sense in the moment, in that it's the regular plan + the cost of the phone divided over 24 months, but the problem with that is that cost of a regular plan, or the features (e.g. amount of data, minutes) that are provided by it, are going to improve substantially over the next 6 month and even moreso over the next 12-24 months. If you can afford it, you're much better off buying the phone outright and then going month-to-month with the cheapest plan you can find. The problem is, most of the people doing this can't fathom affording buying the phone outright, but it's easier to stomach as a hidden cost.
This. It's in the same way that I don't understand people living pay check to pay check. Live really poor for 3 months, then keep your income/costs above 1, and you'll be able to plan better and never pay for anything through the nose. It got me through college without any help from parents nor loans, and it worked when I was unemployed, and obviously works now that I make a lot more.
For many, many people, cash flow is far more important than total amount paid.
Even ignoring personal anecdotes, a perfect example is SaaS: many corporations happily pay a monthly fee even though in total it's far more than it would have been to purchase a similar package outright.
I'm always amazed at how many are actually throwing away money by accepting a 'subsidied' phone which forces you to take a contract 2-3 times as expensive as you would actually need it.
Even if you see it as 0% financing, in my quick calculations it always worked out to be more expensive than just buying the phone outright.