Smartphones may get even more expensive

If you want a new smartphone, you may want to buy it soon.  Experts say carriers could gradually start charging more for smartphones, sometime over the next two to three years.

The idea?  Get rid of smartphone subsidies.  Here in the U.S., only T-Mobile has gotten rid of subsidies.  When you buy a full-priced phone at T-Mobile you don't get locked into a contract.

That plan is generating interest.  A-T And T, Verizon, and Sprint have all said they're watching to see how successful T-Mobile is.  Just last month Sprint's CEO told analysts that carriers can't keep discounting phones, especially since people upgrade so often.

Here's why.  The price discounts cost the phone companies a lot of money.  Take the iPhone 5 for example.  The gigabyte version without a contract costs $649 dollars.  That's a lot more expensive that the $199 you'd pay for a subsidized, contract phone.  So when new phones come out, wireless carriers' profit margins usually plunge.

But getting rid of the subsidy-model could be a tough sell because not everyone may be keen on paying $650 for a smartphone.  That's why all eyes are on T-Mobile.
 

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