Apple has moved past LG in the worldwide rankings of mobile-phone unit sales. According to IDC, Apple is now the world’s third largest mobile-phone manufacturer, behind Nokia and Samsung.

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Cellphone contracts suck, but pretty much everyone in the U.S. still has one. For the vast majority of people, signing a contract is the only way to get the phone they want for a price they can afford. But contracts present problems: They’re 24 months long, but phones typically have issues after the first 12 months (when manufacturer’s warranties have expired); if a phone is lost, the contract still stands, yet the consumer has no phone; and newer phones that are far more desirable are released yearly or more frequently, yet consumers are stuck with the same old phone. But carriers need contracts about as much as consumers disdain them. It’s the only way to ensure that consumers will be there month after month, allowing carriers to recoup the investment they make in phone purchases. (Your typical iPhone is sold at retail for 0 but actually cost carriers 0-0, and this price is increasing.)

But what if all of this changed? What if consumers actually enjoyed signing contracts? What if carriers just gave away phones — all of them —  for free?

What do consumers get?

Carriers need to rethink the current model of phone ownership. It’s not working for them or consumers. So let’s propose a new one: phone leasing. It would work like this. A consumer can get a free phone, any model they would like, and can keep it for 12 months. No charge aside from their monthly bill. If there are any issues with the phone, they would most likely still be covered by the manufacturer’s warranty. And any reasonable issues not covered by the manufacturer’s warranty would be covered by the carrier for free.

What’s the catch?

The carrier owns the phone, and it must be returned after the 12 months is up. Moreover, instead of signing a two-year contract, consumers would have to sign a four- to five-year one. But, and this is a big but, when a consumer gives that 12-month-old phone back to the carrier, they’ll get a brand-new one of their choice — every single year of the contract.

What do carriers get out of this model?

Three things: More phone “sales” — lowering the cost of phone acquisition will lead to more contracts; longer contract means more customer loyalty; and leasing instead of selling phones means the phones can be resold once the 12 months is up (a typical iPhone goes for 0-400 on Craigslist). So instead of a carrier purchasing a phone for, say, 0 from a manufacturer and only getting 0 at retail from a consumer, losing 0 in the process, they’ll be able to resell that phone after 12 months for 0-400. This process will be repeated until the contract ends.

But why would a carrier go this route when the churn rate (the percentage of consumers leaving) is so low? More profit. Smartphone adoption is growing, but it would be growing much faster if smartphones were free. Moreover, carriers are basically competing with the same phones (barring T-Mobile, which still doesn’t have the iPhone) and very similar monthly plans. Adding such a plan would be a game-changer that would provide a worthy competitive advantage. Lastly, churn may be low — Verizon, for instance, reported 1.1 percent among 88 million contract subscribers. That equates to 88,000 people, or nearly half the population of Richmond, Va., leaving every quarter. With each subscriber worth .89 of revenue, .8 million worth of churn walks away each quarter.

Why not prepaid instead?

Of course the prepaid phone market is an option, but for most consumers it is not a tantalizing one. Part of the reason could be due to the lack of cachet; the perception remains that prepaid users don’t have good enough credit to get a contract. But an even greater reason is the lack of cutting-edge phones the prepaid market offers. For instance, the iPhone (as well as many popular phones) isn’t available as a prepaid option. And for carriers, on average, prepaid has a higher churn rate and creates less revenue.

Carriers have little choice but to shake up the cellphone market. It’s ripe for a revolution.

John S. Wilson is a freelance writer who focuses on technology, politics and health policy. He writes for NewsOne, The Loop 21, and Mediaite, and can be reached on Twitter: @johnwilson

Image courtesy of Flickr user jason.lengstorf.

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IBM just released its annual list of five technologies that will change the world in five years. Who knows how these predictions will pan out. But we can very easily rate Big Blue’s predictions from five years ago. Here’s how IBM saw 2012 way back in 2007, how they got it right, and how they got it wrong.

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In the past, we never truly considered that kids might need cell phones. In reality the notion of children even having a cellphone sounded mad to us. Nowadays nonetheless , it's actually quite reasonable for kids to have cell phones of their own. Since our children take part in more and more activities after school and on the weekends we've got a greater must be able to contact them because they're away from us so often. And since they're collaborating in so many activities without us, they are exposed to more risks in the world today. With the threats of drugs, alcohol, crime and other enticements, we often feel more comfortable when we know they've got a telephone available if they should need help in getting away from bad situations.

At the same time, while we want our youngsters to have the security of a cell phone, we do not need the cost of the phone to destroy the budget. When you start looking at phones for youngsters, you will see a whole gamut of options. Of course, your youngsters will often require the latest gizmos that are decked out with all coolest features. But I am absolutely certain you know what that suggests for you.

The latest technology with the top features indicates you will spend a lot of cash on that phone and then have some extra charges for all of the features. And if you simply want your kids to have a way to get in touch with you while they're out with friends or are busy with after college activities, having the most recent phone decked out with the web and a bunch of apps isn't really obligatory. Naturally, your kids will often think differently.

All you really need when it comes to phones for kids is a basic telephone that can make and receive phone calls. And that doesn't necessarily mean that you have to put that cell telephone on an expensive calling plan. Pre-paid telephones can be a good way to get an inexpensive phone for your kids while also teaching them about the responsibilities of telephone ownership. Not to mention, it will not break your financial position. Another thing you'll need to think about; nonetheless is how much parental control you would like to have over your youngster's cell phone usage. Only some of the phones will enable you absolute control over what your kid has and hasn't got access to while using their telephones.

Some of the more dear telephones (the ones that your children really need) may supply you with the control that you need while the cheaper telephones may not really offer this. When you get the telephones that offer maximum parental control with the newest technology and programmes, your kids may think you are rewarding them with the phone, when you're truly doing it for yourself. But when you think about buying phones for kids, you'll need to establish how much you are prepared to spend and how you would like to spend it.

Learn more now Cellular Technology | Phones for kids