Interesting take from the Macalope this week with regards to the ongoing confusion and resentment surrounding current iPhone 3G owners and the price they'll likely have to pay when upgrading to the iPhone 3G S on AT&T. See, the Macalope believes both sides of the debate have it wrong:
[AT&T fronting part of the hardware costs to Apple] isn’t a “subsidy” by the traditional definition. It’s a loan. AT&T is loaning you the money to buy an iPhone and you’re signing a contract to pay it off over the next 18 months. If you decide you want out of your loan, you have to pay a buyout. [...] See, AT&T gets its money one way or the other. Nobody’s “subsidizing” anything.
Even if it is more of a "loan" than a "subsidy", though, does that make understanding the pricing model easier?