Giving away is the norm here
Don't know about outside Japan but giving away phones with a two year contract is pretty standard here. I paid for my iPhone and Japanese think it looks kinda cool, but it is just not that great a phone here. The Camera is useless, it can't read QR codes printed here (which tend have a lot info in them so you need good camera resolution). It does not integrate with the carrier serices like automatic back of user data over network, it is big, and it is not as nice for speed typing Japanese. Most Japanese use their phones as their main email.