A Cheaper Iphone Does Not Necessarily Mean Smaller Margins
First off, if anyone can design a nice phone with less-expensive components, it's Apple. The real challenge will be to reduce the cost by between $50 and $100. This would be handed down directly to the user and the telecom would continue to subsidize the remainder of the price which would be paid back by the user via network charges during the life of the contract. I guess AAPL figures that if Samsung and others are getting subsidized for the #$%$ that they're peddling why not build a better, cheaper phone and put the squeeze on them.
So who pays the full price of the device at the end? Answer: customer. Why are customers fooled and easily manipulated? Let's have a real competition in the service and hardware market. The subisidy must go away and smart consumers will realize this soon. Go to the tmobile webside and compare new plans from value packs which they do not include subisdy expenses.