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AT&T paying Apple $325 for every iPhone 3G?

By: , IntoMobile
Saturday, June 21st, 2008 at 3:59 PM

iPhone 3GIf 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]

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About The Author

Will Park

Will hails from The City of Angels - Los Angeles, California. He spends his time playing with his numerous gadgets and looking forward to seeing what future holds for mobile technology. An avid promoter of a fully "digital" life, he promotes the widespread adoption of truly mobile, paper-less living. He dreams of the day when he can go completely digital. No more snail mail, paper receipts, bound books, notepads/spiral notebooks, credit cards, hard currency. He's a digital warrior - fighting for the converged life. He is an idealist and a realist - he has a perfect view of what the world should be but knows that the world is not perfect. Can we ever hope to see Will's dream become reality? We'll see...

  • Snidely

    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?

  • TOMMY

    if i pay off the phone how much going to be ? plzz let’s ma know i buy a lot up to 20