AfterDawn: News

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

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.

Written by: Andre Yoskowitz @ 21 Jun 2008 16:38

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• 8 comments

• blueroad

  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..

  21.6.2008 18:52 #1

• fgamer

  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

  21.6.2008 21:47 #2

• StanH1000

  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.

  22.6.2008 15:29 #3

• 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!

  22.6.2008 18:49 #4

• TSRSteve

  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.

  23.6.2008 12:35 #5

• BludRayne

  I hate Apple's prices, but I love those willing to shell out cash for them.

  23.6.2008 12:46 #6

• lynchGOP

  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!

  23.6.2008 13:37 #7

• JRude

  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!

  23.6.2008 14:23 #8