the cost of the phones

[unpakwon]

Please clarify the following phrases that are in bold.

1. Providers like Nextel, Sprint, and Cingular were making so much money on minutes that they could afford to subsidize the cost of the phones, which meant they were in the driver's seat, able to dictate to the manufacturers what features the phones would offer and how they would work.

In the above, Does "the cost of the phones" refer to "the price of the phones(the devices themselves)" or "something like telephone bill"?

2. If he couldn't get the deal he wanted, Apple would go into competition with them, contracting to buy wireless minutes in bulk and provide carrier service directly to consumers...

What does the above mean? Does "minutes" here refer to "the number of minutes for which we can talk on the phone (400 minutes per month, for example)"? Then what is "buying minutes in bulk" saying in the context?

Thank you.

[SoothingDave]

1. The cost of the actual phone hardware. In order to make money from you in the form of a monthly bill for using the phone, the company will offer the phone to the consumer at a reduced price.

2. Yes, "minutes" refers to the use of cellular connection time on a network. People who own and operate the networks charge for the use of the network. This is saying that Apple threatened to go directly to the network owners to get access to "minutes." They would guarantee to the network owner the purchase of so many minutes and get a reduced price for them (buying in bulk) and then offer plans to their customers.

[unpakwon]

I see.

Thank you for the help.