The iPhone is ranked as the top smartphone in the United States, and with sales on the upward trend worldwide, one would think that there’s no stopping Apple’s magical handset. As it turns out, the iPhone has a “crutch” that’s key to its success: carrier subsidies.
It’s common practice for U.S. carriers to subsidize a phone to make it more affordable for the average consumer. The trick is that customers get locked into a two-year contract. While Apple profits and carriers take an initial hit off the subsidized model in countries like the U.S. and U.K., less expensive Android devices are dominating markets where consumers pay full price for their new phones.
