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From the News Desk
Monday, 23. June 2008
AT&T Ready to Pay Anything for iPhone 3G’s Right of Carriage
According to a research report created by Oppenheimer financial analyst Yair Reiner, AT&T is willing to pay Apple a price of USD 325 per unit for right of carriage. Yair Reiner reports that AT&T is paying Apple USD 325 in subsidies on each iPhone 3G and another USD 100 if the purchaser is a new AT&T customer, totaling an unprecedented USD 425 in potential commissions per device sold.
Based on expectations that Apple could sell millions of the devices in the US through the end of 2008, the company's subsidies for the phone could run well above a quarter of a billion dollars in the first year alone, and possibly far more. The subsidy is said to be more than 50 percent higher than on most other smartphones, reflecting AT&T’s confidence in the iPhone’s ability to lure in new subscribers and help it make money on higher margin services and data plans.
Apple and AT&T unveiled a new pricing scheme for the iPhone 3G after the device itself was given the standard Apple keynote treatment during the first day of Apple's Worldwide Developers Conference. The 8GB iPhone 3G will cost USD 199, and the 16GB version will cost USD 299, which is USD 200 cheaper than the original version after AT&T agreed to subsidize the price.
Representatives from Apple and AT&T didn't comment, but other analysts said Apple is receiving a tidy sum from the wireless carrier. It also shows that while the carriers have been successful in convincing Apple to abandon its revenue sharing agreement, the company has been as equally successful in getting its partners to fork over a higher initial payment to sell the phone.
Based on expectations that Apple could sell millions of the devices in the US through the end of 2008, the company's subsidies for the phone could run well above a quarter of a billion dollars in the first year alone, and possibly far more. The subsidy is said to be more than 50 percent higher than on most other smartphones, reflecting AT&T’s confidence in the iPhone’s ability to lure in new subscribers and help it make money on higher margin services and data plans.
Apple and AT&T unveiled a new pricing scheme for the iPhone 3G after the device itself was given the standard Apple keynote treatment during the first day of Apple's Worldwide Developers Conference. The 8GB iPhone 3G will cost USD 199, and the 16GB version will cost USD 299, which is USD 200 cheaper than the original version after AT&T agreed to subsidize the price.
Representatives from Apple and AT&T didn't comment, but other analysts said Apple is receiving a tidy sum from the wireless carrier. It also shows that while the carriers have been successful in convincing Apple to abandon its revenue sharing agreement, the company has been as equally successful in getting its partners to fork over a higher initial payment to sell the phone.
