Why is a $200 iPhone 5s $650?

So I got a new iPhone 5s and I got it via UPS. After I opened the package I saw the paper every package comes with that lists the prices and everything. I saw that the phone was $649.99. I don't know why because its not unlocked and I have a 2 year contract.

So you paid $650? Who is the provider that your in contract with?

That might just be the MSRP from Apple. Or what your replacement cost is if you break it.

Thats probably the phone cost, if you bought it on contract then the carrier pays most of it and you pay 199.

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