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You have to read the story carefully to understand the intricacies of iPhone pricing, but in the end it's pretty crazy. However, this is really a story about how the cellular phone industry uses subsidies to attract subscribers, and then uses monthly fees to pay up the remaining cost of the phone, and to actually pay the costs of providing cellular service. It's a pretty unique revenue model and—obviously—can create some pretty crazy situations. I'm not surprised that the entire system gets twisted around, especially in the midst of hundreds of thousands of people who want to upgrade their iPhone, either early or later.
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