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Android Handset Prices

Feech

Lurker
I'm not sure what the cost of licensing Windows Mobile for a smartphone is in relation to the total cost of of the phone, my only experience is with building computers and in a lot of cases software is as expensive as the hardware itself.

So my question is why are Android handsets so expensive without subsidy? The G1 with T-mobile retails for $400 dollars. I thought Android would finally bring the masses $200 handsets without contract? Can we discuss this for a bit or at least hear some thoughts?
 
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