[Coda]

Most people don't drop that much money on the phone up-front. Instead, their devices are subsidized to their cell phone plans, either as a monthly payment until it's paid off or as a part of the contract ("free phone with a two-year contract"). The latter has grown very unpopular in recent years so you don't see it very much anymore. Then you also get a discount for trading in your old phone -- whatever value is left in your old phone gets applied as a down payment against the new one.

Prepaid phones get away with it because prepaid minutes are ridiculously expensive compared to a standard phone contract -- they sell the phones at a discount because they know they'll make up for it by selling phone minutes.