Cutting costs but still want a fancy phone?

By Sinead Carew

NEW YORK (Reuters) - The U.S. economy's worst crisis since the 1930's depression may have some consumers questioning the wisdom of buying a fancy new cell phone just yet, but those who can't wait just might find some deals out there.

Now that cell phones are more of a necessity than a luxury for most, the questions are: Which one to buy? How many fancy features do you want? And which service provider fees can you afford?

While iPhone, BlackBerry Storm and G1 may have a higher profile, bargain hunters may instead look this holiday season at less famous smartphones such as Centro, BlackBerry Curve and the BlackJack II.

The latest devices with touch-screens or computer-like keyboards seem a lot more affordable than last year, as AT&T Inc set a new benchmark for so-called smartphones with a $199 price tag for Apple Inc's latest iPhone.

But smartphone buyers also need to examine the service fees they'll have to pay for two years, as phone discounts come in exchange for a commitment, as carriers look to recoup the portion of the phone's cost that they shoulder.

Also, operators won't sell you some smartphones unless you commit to a monthly fee for data services such as Web surfing, which take advantage of the phones' computer-like features.

"It is not just the price of the hardware, as 2-year data rate plans are the bigger issue, especially when consumers are worried they may not have a job in the coming months," said Gartner analyst Hugues de la Vergne.

For example, AT&T makes iPhone users sign up for a data service plan costing them at least $30 a month for unlimited Web access as well as voice services. It costs another $5 for 200 text messages or $20 for unlimited texting.