If something sounds like it’s too good to be true it probably is. For example, if you come across a decently specced Android phone that costs $50 chances are the manufacturer is making money on it in some other way, such as surveilling the user to sell their information:
WASHINGTON — For about $50, you can get a smartphone with a high-definition display, fast data service and, according to security contractors, a secret feature: a backdoor that sends all your text messages to China every 72 hours.
Security contractors recently discovered preinstalled software in some Android phones that monitors where users go, whom they talk to and what they write in text messages. The American authorities say it is not clear whether this represents secretive data mining for advertising purposes or a Chinese government effort to collect intelligence.
Is the data being used for advertising or for the Chinese government? Why not both? If the Chinese government is anything like the United States government it’s willing to pay a pretty penny to coax companies into spying on users. I doubt this scam is solely for intelligence gathering since it’s a high cost (manufacturing lots of handsets) strategy with no guarantee of return (how do you convince people with intelligence worth harvesting to use one of these unknown Android phones over an iPhone) but the collected data very well may be sent off to the Chinese government.
This story goes along with the There Ain’t No Such Thing as a Free Lunch (TANSTAAFL) principle. If you’re using a product or service for free then chances are that you’re the product. Likewise, if you’re using a product or service that appears to be subsidized then the provider is making money back some other way. In the case of cellular network providers subsidized phones were a convenient way to lock customers into two year contracts. In the case of handset manufacturers phones can be subsidized by collecting user data to sell to advertisers.