[Zak]

It seems to me that the goal of selling smartphones is no longer to profit from the sale of hardware, but to put your own services and content stores in front of the user. We've been seeing this in the PC industry for a couple decades now, with moderate push back from Microsoft.

[debt]

It seems this is where most hardware is headed. Companies just want to get people integrated into their ecosystems as quickly and easily as possible. They don't really care to make money off the hardware itself. Also, the cost of manufacturing many of these devices is practically negligible at this point.