Are Mobile Device Makers Finally Ready To Swear Off Carrier Subsidies

We’re beginning to see hints that mobile-device makers may be prepared to start weaning themselves off carriers handouts and pricing their products based on what they actually cost. What’s less clear is whether everyone -- not just Apple -- can be truly competitive and make enough money in the market without those juicy subsidies.

So now, as challengers get ready to try and dent Apple’s runaway lead, do they need to accept heavy subsidies on 3G and 4G products in order to compete? The real question is what type of gross margin are those competitors willing to accept as they acknowledge that the amazing mobile growth of the past several years simply would not have happened without generous carrier subsidies that reduced the opening price of their wares, not to mention the heavy promotion as those carriers went about recouping their investment.