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The New iPhone5S & 5C

I saw the release today. It says the 5S will start at $199 for a 16-gigabyte model and range up to $399 for a 64-byte version with a two-year contract. I thought iPhones were in the $600-$700ollar range. they say the iPhone 4 will be free with a two year contract. How can they sell one today for $500 yet give it away tomorrow?

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