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AT&T subsidizing over $400 USD for each iPhone sale

21 June 2008 16:38 by Andre "DVDBack23" Yoskowitz | 8 comments

After being unveiled a couple of weeks ago at the very consumer attractive price of $199 USD, the iPhone 3G is set to go on sale next month through Apple and AT&T.

According to new reports, it appears however that AT&T is subsidizing the phone, over $400 USD in some cases, just to be able to reap in the benefits of a 2 year contract including data plans.

Oppenheimer financial analyst Yair Reimer writes that as a general rule of thumb, wireless carriers subsidize the price of smartphones by about $200 USD and make it back from expensive data plans. AT&T it appears though, is losing $325-425 for each unit sold and could be buying each phone from Apple for as much $724 USD for the 16GB model.

Piper Jaffray analyst Gene Munster also wrote a report estimating that Apple will make about $466 USD per iPhone. Bernstein Research's Toni Sacconaghi, in a separate report says he anticipates Apple is selling each phone at $700 USD.

Permalink to this article | Topic: Phones

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Discuss this article!
blueroad (Newbie) 21 June 2008 18:52
hmm.."got nothing out of em!" ..is anyone else failing to understand the significanse of this article? other than the fact (which we already knew) that apple is going to make a putload of money out of this new toy.. i mean still the fact remains we have to buy them after they are being subsidized by the providers in exchange for long term plans.. [ + quote]
fgamer (Member) 21 June 2008 21:47
I hate Apple because of their inflated crazy prices and choice of companies to do business with. I wont be getting an iPhone, i'll wait for a competitor to release a ripoff of the phone. =D [ + quote]
StanH1000 (Senior Member) 22 June 2008 15:29
Agree Wouldn't go back to ATT (Cingulair) for any phone at any price. After all is said & done, you must be able to make telephone calls reliably. Certainly not the case in the Phoenix/Scottsdale area. [ + quote]
JRude (Junior Member) 22 June 2008 18:49
$700!? Are people out of their MINDS? You can buy a functioning nice PC, especially one of the mini PC's coming out for far LESS than that kind of $$$! Get a junk phone and save your $$$! lol! Glad I am not a market driven idiot that succumbs to the shills! [ + quote]
TSRSteve (Newbie) 23 June 2008 12:35
*Originally posted by JRude:* $700!? Are people out of their MINDS? You can buy a functioning nice PC, especially one of the mini PC's coming out for far LESS than that kind of $$$! Get a junk phone and save your $$$! lol! Glad I am not a market driven idiot that succumbs to the shills! I'm not saying that this is the best item ever and I personally don't own one and wouldn't for that kind of price. But a functioning pc won't fit in your pocket and you have to pay out the rear for up and coming technology. I'm pretty happy with a razor and my 80gb video ipod. [ + quote]
BludRayne (Junior Member) 23 June 2008 12:46
I hate Apple's prices, but I love those willing to shell out cash for them. [ + quote]
lynchGOP (Inactive) 23 June 2008 13:37
*Originally posted by BludRayne:* I hate Apple's prices, but I love those willing to shell out cash for them. I couldn't agree more!!! I'm waiting for the Samsung Omnia. Iphone killer no matter what! [ + quote] This message has been edited since posting. Last time this message was edited on 23 June 2008 13:38
JRude (Junior Member) 23 June 2008 14:23
Fortunately I don't have to be connected 24/7 and I do NOT pay out the rear for ANYTHING! You have to pay because you CONTINUE to do so! [ + quote]