AT&T paying Apple $325 for every iPhone 3G?
Posted by Will on Saturday, June 21st, 2008 at 3:59 pm under Apple, Cingular/AT&T, Financial, Rumors, iPhone
If you thought paying $299 for a 16GB iPhone 3G in White was more than just pocket change, imagine how AT&T feels, paying $325 for every iPhone 3G. At least that’s what Oppenheimer equity research analyst Yair Reiner has told clients.
Keeping in mind that carriers generally pay a maximum of $200 per handset, Reiner believes that AT&T sees the iPhone 3G as a potential blockbuster hit that will increase the No. 1 US wireless carrier’s subscriber-base and help increase ARPU (average revenue per user) through the iPhone data plans.
The higher subsidy “reflects AT&T’s faith in the iPhone’s ability to attract new subs and increase ARPU,” says Reiner. Adding that other companies, like RIM and Nokia, will have to “scramble to hit a lower, less profitable price point.”
And, as if the $325 subsidy wasn’t enough, Reiner believes AT&T to be paying Apple a $100 bounty for every iPhone 3G contract that is activated in an Apple retail store. That would put Apple’s revenue for every iPhone 3G sold through Apple stores at $425. Take in to account the rumored $100 cost to produce an iPhone, and Apple could be poised to rake in a hefty profit on each handset.
If true, it seems that Apple is taking a decidedly different approach to their revenue-sharing model that was instituted with the first-generation iPhone, while still making roughly the same revenue. Good for them.
[Via: Barrons]
June 24th, 2008 at 4:32 am
You guys are clueless. A $25 subsidy is nothing in the US industry. Carriers regulary pay $100-150 per handset, just to lock you in to those 2 year contracts. Those fancy “free” handsets your operator offers cost a pretty penny. I would be willing to wager that the $25 subsidy on the iPhone is lower than the subsidy any other high-tier phone that AT&T offers. Any ATT employees want to confirm?
August 15th, 2008 at 1:14 am
if i pay off the phone how much going to be ? plzz let’s ma know i buy a lot up to 20