Device Subsidies Do Matter

A recurrent complaint in some quarters is that mobile phone subsidies, tied to service contracts that recoup the cost of the subsidies, inhibits consumer freedom to change service providers, and there is some logic to the thinking.


But it also is true that without such device subsidies, consumer adoption of the latest devices, and therefore the pace of innovation in the mobile apps space, would be less. 


One clear example are buy rates for Android and Apple iPhone devices in countries where users generally buy subsidized devices, compared to markets where users generally pay the full retail price of handsets. 


As this chart from the Wall Street Journal illustrates, subsidies have a big and positive impact on consumer willingness to buy and use either Android smart phones or Apple iPhone devices.