It wasn’t long ago that major cell phone service providers gave handsets away if you were willing to tie yourself into a long enough contract with them.

Late last year, several European cell phone providers turned tail on the notion of the few phone or for handset upgrade, all of a sudden waxing environmentally responsible and showing a new respect for their users’ budgets. They actually gave subscribers a break on service plan renewals if they kept their old phones rather than upgrading.

That’s all well and good. But, now, digital gadget giant Acer, in its infinite wisdom, has pointed out that, of the 4+ billion people worldwide who use cell phones, only about 200 million of them — roughly five per cent — use smart phones. Add to that the ‘pessimistic’ prediction within the cell industry that smart phone sales will grow at only about 15 per cent per year over the next five years.

So… How does Acer propose to encourage people to upgrade to smart phones?

Why, give the phones away, of course!

From a manufacturer’s perspective, the wholesale cost of a phone handset is the only barrier to service providers offering creative promotions. Acer’s goal is to drive the factory door price of smart handsets low enough that cell service providers will be able to build ‘free handset’ service packages around them and still make money.

With that in mind, Acer announced this week that it will introduce not one but eight inexpensive smart phones through this year, in pairs, starting this month.

Two of those phones, scheduled to come out this October, “will be free after subsidy by the [service] operator,” the head of Acer’s Smart Handheld Business Group, Aymar de Lencquesaing, told reporters Cebit trade show in Hanover, Germany, earlier this week.