Apple Makes $831 On Each AT&T iPhone

Ponca City, We Love You writes "The NYTimes reports that Gene Munster, an analyst at Piper Jaffray, has studied Apple's financial statements and come to the conclusion that AT&T is paying Apple $18 a month, on average, for each iPhone sold by Apple and activated on AT&T's network — up to $432 over a two-year contract. This shows how much incentive Apple has to maintain its exclusive deal with AT&T rather than to sell unlocked phones or cut deals with multiple carriers. Last week Apple disclosed that 250,000 iPhones had been purchased but not registered with ATT that Apple thinks are being unlocked so Apple has now taken action to curb unauthorized resellers by limiting sales of the iPhone to two per customer and requiring that purchases must now be made with a credit or debit card — cash will not be accepted." The latter article links to a US Treasury page explaining the incorrectness of the widely-held belief that cash cannot be refused for any transaction.

Comments

Math.

[attemptedgoalie]

$399 phone
$432 from 24 months @ $18/month
----
$831

Re:Too bad apples lawyers do not understand Law.

[Todd Knarr]

Cash must be accepted as payment for debts. IOW if you owe someone money and offer cash in payment, they can't legally refuse to accept it. If you do not owe them money, though, then no debt exists and that rule doesn't apply. A merchant's entirely free to refuse any method of payment for a transaction where no debt exists yet.

For the iPhone, this means that if you walk up to the counter wanting to buy, they're allowed to refuse to sell for cash. Once you've bought the phone and used the service and now owe them money for that service, however, they're not free to refuse a cash payment.

Re:Too bad apples lawyers do not understand Law.

[rueger]

Sigh... from the US TREASURY PAGE that is LINKED from THE SUMMARY above:

Question: I thought that United States currency was legal tender for all debts. Some businesses or governmental agencies say that they will only accept checks, money orders or credit cards as payment, and others will only accept currency notes in denominations of $20 or smaller. Isn't this illegal?

Answer: The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."

This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.

Of course, perhaps you just don't believe what the US Government would write on their own web site. Which raises the question of why you would trust their currency enough to use it.