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.
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