FK, the pure sense of the word subsidy doesn't apply at all since there are no government monies in play. At 0 percent loans are common when the seller is also the lender. Furniture stores do that all of the time. Interest only came about when pure financial institutions got into the loan game. That is the only way a 3rd party lender can make a profit. If the lender is also the seller of an item or service then they already have profit built into their price, regardless of they get it over time or in one lump sum. In the old days it was called running a tab.
Regardless, your overall point is that discounts get people to buy and pay for service. And I am fine with that. But making people think they got a $700 smartphone for $200 is just bad in the sense that people then think they are entitled to cheap phones. Reminds me of when the Bells used to give customers a telephone for getting a landline. I remember hearing older people (grandparents and such) talk about how they can't believe you had to buy a telephone these days. Nevermind that the price of the phone calls had dropped to almost nothing. LOL Same concept.
LWA, I hear what you're saying and I am not in disagreement in principle. Still, subsidy, even in the pure sense of the word does not apply exclusively to government, although I agree that government is one of the largest players in the economy regarding subsidy. The definition of subsidy is below in several sources. In one definition, it says "pay part of the cost of producing (something) to reduce prices for the buyer." Producing encompasses everything from conceptualizing and initial R & D, all the way to financing, distribution and implementation.
Merriam-Webster says "to help someone or something pay for the costs of (something)". If I don't have all the funds to pay up front, and so the manufacturer or retailer helps me to pay by allowing me to pay over time, they are financing or bankrolling my purchase and by multiple definition sources are subsidizing my purchase. Coupons, store specials, "buy one get one free", any assistance provided to me as the consumer which makes it easier to purchase and take ownership of a product or service is a subsidy. It may be a hard concept for some consumers to grasp since they are looking at the lost profit by the corporation as something that wasn't there to begin with had they not made the purchase so it's not a cost in their minds. They also look at zero percent financing as having no cost to the provider, simply because the provider has the money already and isn't earning additional profits by lending it for free.
Money as it pertains to Time Value of Money, has a cost. A dollar in my hands today has greater value than a dollar in my hands 2 years from now. There are many reasons from inflation to opportunity cost (the cost of the lost opportunity to investv that dollar and receive a return on that investment otherwise). So if I have to put out a dollar today, it's more expensive to me than if I have to only put out one 24th of that dollar each month over the next 24 months. That reduced cost to me is a subsidy.
So likewise a dollar received today by the manufacturer or retailer for the purchase of a product has greater value than that same dollar sliced into 24 equal payments and received over two years. That manufacturer or retailer has to bankroll the purchase, and that means financing it - even if at zero percent interest. Just because they have profit built in doesn't mean it isn't less profitable to receive that payment in 24 installments versus one lump sum. There are a gamut of costs involved for the manufacturer or retailer in order to bankroll those purchases from administrative, to accounting, to billing, to postage , to insurance, etc., not to mention opportunity cost as those delayed dollars are not there in the corporate coffers to fund new products or services, purchase additional inventory, fund the operating expenses or advertise to increase sales, thereby reducing the potential for additional profits.
Wikipedia says (with references);
"Subsidies come in various forms including: direct (cash grants, interest-free loans) and indirect (tax breaks, insurance, low-interest loans, depreciation write-offs, rent rebates)."
Thefreedictionary.com says;
"subsidize
verb
To supply capital to or for:
back, capitalize, finance, fund, grubstake, stake.
Informal: bankroll.
Idiom: put up money for."
So in this debate, either as the manufacturer or as the retailer financing or bankrolling the purchase of a product by installments over time, even if at full retail price and even if at 0 prevent interest OR at an agreed upon interest rate is by definition subsidizing.
References; I.word.com, thefreedictionary.com, Merriam-Webster, Wikipedia
