So, to take a step back and look at the big picture, the problem is as follows: If smartphones become much less expensive, then consumer attitudes towards security might change -- at the same time as the market penetration of these devices increases dramatically. As a result, the pressure from crimeware would increase at the same time as the defenses may not keep pace. Apart from resulting in a large number of infected phones, there would be secondary effects due to what these infected phones could be commanded to do -- to monetize the attacker's presence. We all would suffer.
Clearly, something has to be done, and it might involve drastic changes of how we manage information and access. And it all starts with the question: "Free iPhones -- then what?" What are the other possible scenarios, and what would be their implications? It is time for us to start thinking of security consequences of seemingly trivial trends -- before it is too late!