When signing up for a 3 year plan, basic phones are available for $0. The sales guy behind the counter says he doesn't sell many of those. Most spend at least $50 for a more featured phone.
Without spending hundreds of dollars for an iPhone or a Blackberry Storm, a mere $50 spent with a new plan gets a pretty good phone.
As an example
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While not as fully featured as a more expensive phone, this phone packs a pretty good punch for the average consumer. Just a few years ago, this phone would have been considered top-of-the-line; a smart phone from 2007.
Following this trend, we can expect a basic $50 phone two years from now to look a lot like the current top offerings from Blackberry or Apple. Essentially, ALL phones will be smart phones.
The term 'Smart Phone' will wither and die, as a moniker for differentiating certain attributes on phones will no longer be required.