People that felt this way should have purchased the Nexus One from Google while they were generally available. If more folks had, it might have validated the carrier-less model of selling phones.
It's hard for any company to try and work against the carrier-subsidized pricing of handsets. As long as carriers are supplying the access, this will continue to be the case.
To pay $500 for a phone, versus the $100 subsidized price, is a silly move—especially if you're planning to upgrade every 2-3 years.
I say this because the service from the carriers still costs the same regardless of how you obtained the handset, and in some cases you may be paying even _more_ for service if you don't have a contract.
(Of course, I'm speaking with the US/Canadian carriers in mind. I know things are better outside of North America.)
Are all the features accessible in non-contract plans?
I've got a few contract-only perks here in Canada on Rogers, such as the 6GB data plan add-on for $30/mo, and an "Employee Purchase Program" discounted voice service at $17/mo.
I don't think you can get non-contract data plans for under $30, and that only buys you 250MB/month, and voice plans start at around $25-30/month.
I may be able to set up a similarly-priced plan up here, but I would lose out on many of the important features (tethering, visual voice mail, larger data caps, free evening/weekend calling, etc.)
I did buy a N1 (gray import even). Too bad it has its hardware flaws: The touchscreen is really bad (choppy, inaccurate) and the button on my wired headset started working only rarely after two weeks of usage (sometimes the press isn't recognized, sometimes as "jump back" - and sometimes it even recognizes button presses even if there's no button on the headset).
Yeah. I've also got an N1, and the hardware flaws suck. The touchscreen is my biggest complaint, having previously used an iPhone. That said, I'm extremely pleased with it overall, and the lack of a carrier telling me what I can and can't do with it is surprisingly awesome.
My biggest issue with buying an unsubsidized phone is that I would still be paying the carrier a premium for subsidizing a phone purchase (to my understanding) without actually getting that benefit. (I guess there are other carriers, I have not actually bothered to look) In the end I just seem to be loosing about $400 or so since my phone bill remains the same, but I have to spend more to buy the phone.
Actually, as another poster already pointed out, with TMobile you don't have to pay the carrier a premium. They have a set of plans (called "Even More Plus") that are unsubsidized and are cheaper monthly.
Since the initial N1 model used the Tmobile 3G bands, it made a perfect match, and a great deal for anyone willing to do the math.
