Why are smartphones so expensive?


I'm in the market for a new phone, and it got me thinking; phones can't possibly cost that much to make. So I did some research, and found that a leading phone like the iPhone 4s takes only $170 to $180 to make, whereas it retails for $649.99. Even the iPad at $499 is cheaper than the iPhone and it obviously costs a lot more money to make given the larger screen and larger parts. If phones were sold at $299 or even $399 unlocked, the amount of unlocked phone sales would skyrocket.

Then I realized that this is all a marketing scheme. Phone providers don't want you to buy unlocked phones, because that means you won't be forced to choose their service. The ridiculous prices force you to buy a phone on a 2 year (or 3 year if you're in Canada) contract so they can squeeze as much money as they can from you through their $50/month minimum smartphone plans. People like me who can't afford to pay that much for 500MB of data and some calling & texting features are stuck deciding whether they want to choke up $600 on the spot or pay close to $2000 throughout the contract.

Do you agree that phone prices are ridiculous, or am I just a cheap bastard? Let me know your opinion.