I agree with the efficiency part with regards to android lowering the Barrier to Entry, but the 2 year contract to make the devices "affordable", surely doesn't work in favor of market efficiency.
Certainly there are factors that work against efficiency. Any kind of lock-in, be it an enforced contract term or a putative monopoly position for Apple is going to harm things. But on balance, Android being cheap and easy (and thus fragmented) has made smartphones cheaper/better. I don't think there's a serious counterargument to be made on that point.
My N4 out of contract from google wasn't that much more than say an S3 on contract... My last three phones have been off contract with cheap all you can use reseller services... the lower month to month makes up for the price difference in 4-6 months
