Someone had to blink, especially as basic Android phones got better and cheaper.
Pre-iPhone, most contracts were one-year, and typical expensive phones cost $3-400 unlocked. Post-iPhone, phone costs go up, so contracts get longer, but now the carriers are in a position where they're treating expensive iPhones the same as the same as less-expensive base-model Androids. Sure, they can make a killing on the less-expensive phones in that model - since the subsidy amount is greater than the cost of the phone - but it gave T-Mobile incentive to ditch the model and pass on some of the savings to budget-conscious consumers.
And ultimately, that's not such a bad thing for the carriers, but it is a bad thing if almost all the phones you sell are on the "more expensive" side, since you're now competing more directly on price.
Pre-iPhone, most contracts were one-year, and typical expensive phones cost $3-400 unlocked. Post-iPhone, phone costs go up, so contracts get longer, but now the carriers are in a position where they're treating expensive iPhones the same as the same as less-expensive base-model Androids. Sure, they can make a killing on the less-expensive phones in that model - since the subsidy amount is greater than the cost of the phone - but it gave T-Mobile incentive to ditch the model and pass on some of the savings to budget-conscious consumers.
And ultimately, that's not such a bad thing for the carriers, but it is a bad thing if almost all the phones you sell are on the "more expensive" side, since you're now competing more directly on price.