One of the interesting things about smartphone subsidies is that they’ve essentially convinced many people that they’re getting a steal when they buy a smartphone for $200 with a two-year service agreement, even though they’re making up the difference by being obligated to pay the carrier’s contract rate over the next 24 months. Now gadget trade-in website Gazelle has shared some new survey data with us that suggests many us are completely clueless when it comes to how much we’re really paying for our smartphones.

RELATED: Is America getting over its smartphone subsidy addiction?

Gazelle recently conducted a survey of 1,000 smartphone buyers and asked them whether they knew that the prices they were paying for their phones with two-year contracts were subsidized prices… and more than 48% of them said they didn’t. What’s more, 42% of people surveyed said that they didn’t know that they’ll end up paying the full cost of their phone over the course of their two-year contract with their carrier.

This is particularly interesting because less than 12% of people surveyed said they’d be willing to pay $50 or more for their phones, which suggests that many people really don’t know what they’re getting themselves into when they sign a two-year deal to get a shiny new flagship smartphone.

Check out Gazelle’s full survey results below.


Poll size: 1,000 adults

  1. What do you think is the actual retail cost of a smartphone without a carrier contract?
    1. $200 – 23.2%
    2. 300 – 8.8%
    3. 400 – 14.3%
    4. 500 – 14.3%
    5. 600+ – 39.3%
  1. How much would you be willing to pay for a smartphone?
    1. $200 – 61.9%
    2. $300 – 16%
    3. 400 – 9.7%
    4. 500 – 4.7%
    5. 600+ – 7.7%

Men vs. Women

  • 44% of men would pay $300+ for a smartphone
  • 25% of women would pay $300+ for a smartphone
  1. Do you know the price you pay for your smartphone when you upgrade is a subsidized price?

    1. Yes: 51.6%
    2. No: 48.4%
  2. Do you know that you pay the full retail cost of your phone over the course of your carrier contract?

    1. Yes: 57.8%

    2. No: 42.2%

Prior to joining BGR as News Editor, Brad Reed spent five years covering the wireless industry for Network World. His first smartphone was a BlackBerry but he has since become a loyal Android user.