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Cell phones have undergone rather substantial changes over the past few years, both in design and function. They're getting bigger, faster and more powerful with each passing moment, and being adopted for applications we never imagined possible just four or five years ago. As you would expect, along with increased demand for smartphones with added functionality, price has also experienced a nice bump.

Just two or three years ago, $199.99 with a two-year agreement would land you one of the best phones on the market. The larger capacity iPhone, priced at $299.99 with a contract, was easily the most expensive contracted phone around by quite a margin.

Now, however, $199.99 will land you in the middle of the pack. Using Verizon's current crop of smartphones as an example, the LG Revolution, HTC DROID Incredible 2 and Motorola DROID 3 are all priced at $199.99. It's not that they're bad devices or anything, but they're hardly the best. If you want to buy into the best Big Red has to offer, you will be looking to pay between $250 and $300 with a two-year agreement for your next phone.

It's worth noting that both Sprint and AT&T have been pretty good about keeping their devices below the $200 mark, but Verizon isn't the only carrier worth mentioning. T-Mobile also has high-end devices that are priced well over $200 with a contract. The newly announced HTC Amaze 4G and T-Mobile's Smasung Galaxy S II variant are priced at $259.99 and $229.99 with a two-year agreement (after a $50 mail-in rebate), respectively. And lest we forget about the latest T-Mobile BlackBerry, the Bold 9900, which touts a questionable $299.99 subsidized price.

At first, it's easy to assume that this price increase is due to more powerful phones – better, more expensive internals. Dual-core processors, large, capacitive displays, better cameras and more memory have driven the manufacturing costs up, right? Actually, not so much. In fact, a lot of phones are actually cheaper than or the same price as comparable phones from last year. Take the HTC Sensation 4G for example. It currently sells for $499.99 without a contract from T-Mobile, which is the same unsubsidized price as the myTouch 4G from late last year. The Sensation has a larger and higher resolution display, a dual-core Snapdragon processor (versus the myTouch 4G's single-core Snapdragon), more memory, etc. Even the DROID Bionic is below the $600 mark unsubsidized, which is also around the same price as its DROID counterparts from last year.

Since the average contracted high-end smartphone price on T-Mo and Verizon is approaching $300, and unsubsidized prices are staying relatively the same, it means that said carriers are simply discounting phones less. But why? Are they just getting greedy? I would like to think so, but I'm not so sure.

Notice that all of the phones that are selling for $200+ are 4G capable devices (save for the LG Revolution and 9930 on Verizon, which I still do not quite understand). Since carriers have decided not to charge extra for 4G access (... yet), they're making a few extra bucks off of the initial price of a contracted phone. You are buying into a device with access to a much faster, premium network that has cost the carriers billions of dollars to create and expand.

Those of you who thought you were getting 4G at "no extra charge," have only been fooled by clever pricing and wording. The way I see it, though, paying $50 or $100 extra initially is a great way to help the cause and is a heck of a lot better than paying an extra $10-20 per month for 4G access for 24 months.

What do you think, ladies and gents? Is paying a little more for a 4G-enabled device better than paying for 4G access each month? You must also consider that without sufficient funds, carriers will have to slow the progress of their 4G expansion. That said, not everyone buying into one of these devices is covered by 4G yet. So is this the best way for Big Red and Magenta to approach this? Let us know how you feel below!


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31 Reactions to this post

"Are today's smartphones too expensive?"


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???? ???? ??????? Yes from verizon only!
Jenny Phothisane Yes, I do think that cell phone's are too expensive these days. Everyone wants a good phone that has everything on it for a good price. I also think it's crazy that phone companies no longer offer unlimited data plans. I haven't lived in the states since 2006 but I've heard all sorts of stories about what phone companies are doing. Never the less, cell phones should be cheaper, period!
Nicole Selah Yes they are, which is why I only by the dumb ones. lol I usually buy phones when they are fee or under $60.00 which is about 6mos after they come out.
Gerald Dawkins Yes they are headed on the wrong direction, but if don't run and get them as soon as they are released the price will drop. We need to remember we hold the power. We hold the power.
Erman Guido Not with a contact renewal
Adrian Salazar Yeah they are, just recently they starting to see the $300 price mark on contact and as for apple there phones are over priced for a outdated phone...
David Ryan Gutierrez i say yea but when i upgrade and whatever i always go for the phones that cost a penny like rite now im rockin the galaxzy s that was only a penny its 3g but it gets the job done for me i really dont get excited for new phones its always bigger screen faster processer etc.
Facebook user Definitely!
Philip Weißner not all... Look at the HTC 7 trophy I've got it new from amazon. com for 180 € ...
Chris Sanchez Yes!!!!! :(
Wayne MacLeod Im getting to the point that a phone with all the bells n whistles is just not that important. I don't need to be that connected. My next phone will be just that.... a basic phone.
Mitch Gales @HomasydeMcclam haha, yeah right. You actually think that phone company gives a shit bout you?? Only time they want anything to do with you is the 1St of the month
Tim Fuhrmann Yes and no. As these phone get bigger screens and faster processors and more ram and better cameras etc..they are bound to start costing more, but that being said, I think $200+ WITH a 2 year contract is a bit much for a cell phone.
Heather Llenos Just got the HTC Sensation 4g and definitely don't think it was too expensive. I'm very impressed with it. If the Galaxy S2, etc., are better multimedia performers than this phone, they're definitely worth the price tag.
Jae Martinez Yes cause if they don't work like a smart phone, what's the point of paying so much for it????
Ahsan Pervaiz yup they are really expensive
Homasyde Mcclam I think those of us that is already wita company should get a better deal than new consumers. It's called loyalty!!!!!!!!!
Daniel Perez F yeah they are
Steven Basso Not really look at he first cell phone that came out how big was it and how expensive was it 1200 dollars and just called
Abram Wenevermet Dennis The phones aren't worth what they charge full retail.. A ploy 2 suck you into a contract.
David Hilgendorf Not at all. Everything in the world can't be free. Technology advances and manufacturers need the product and prices go up. I'm more worried about fuel prices and health care. I think going over 250 with a contract is a little high but I'm not sure how much 4g/LTE chips cost. Support is the big thing cause if the device will see support for two years then its worth it.
Don Lynn Phone prices would be easier to swallow if plan prices weren't so ridiculous for what you get.
Xavier Benjamin Flores the phones are ok priced its all about the plans
Jordan Mamba WorldPeace Konesavanh But for the price you get a reliable phone... Hopefully. #LGTHRILL
Thyanz Primeval Adithyanz OMG...Blackberry Dakota, Motorola Atrix 4G, Xperia Arc, HTC Sensation, Galaxy S2 are very expensive. But Iphone 4G is the most expensive, then i cant imagine how more expensive Iphone 5G will be.....
Yadiel Omar Nieves obviously!!
Kevin Choi and so are the plans!
Abram Wenevermet Dennis Yes.. And are cheaply made.
Dalton Severns Yes. I will just stick to my env3 that already is plenty fast.
Joel Charles YES TOOOOOOOOOO EXPENSIVE




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