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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.
as correct as that explanation is for the 831 number, the math is wrong.
apple doesn't get iphones from fairies. They pay money to build them.
A company is making money in a business deal! What is this country coming to when a company can produce a product people want to buy and then actually make money selling it?
R: That voice. Where have I heard that voice before? B: In about 365 other episodes. But I don't know who it is either.
The greatest piece of legislation that could be passed would be one requiring that software and hardware manufacturer's could not impose restrictions on how it is used. Not only would the iPhone situation be a non-issue, but the way would be clear for Linux developers to provide drivers without fear of prosecution by hardware manufacturer's. Of course, given greed, this is nothing more than a pipe dream...
"With practices like this why would anyone want to do business with Apple?"
Because the things they make are pretty.
People say things like "it's Apple's right" and "good for them". Of course, it's Apple's right to do those deals.
Nevertheless, where do you think this money is coming from? Do you think that AT&T is giving that to Apple because they are such good buddies?
No, you are paying for it one way or another (e.g., by paying a premium for their sluggish EDGE service).
You know, given that it's well understood before the purchase the AT&T is the exclusive carrier, I really don't see why this could be something you could complain about. Unless you feel entitled to the iPhone, in which case, bully for you, but you're wrong.
Slashdot - where whining about luck is the new way to make the world you want.
> YOU CAN NOT REFUSE LEGAL TENDER. That is a stone cold law from the 1800's.
Of course you can. "Legal tender" simply means that it is a legally acceptable form of payment, not that you must accept it.
I can demand live chickens and jelly beans as payment if I feel like it, and you waving cash in my face while threatening to call the police can't make any difference.
"Slow down, Cowboy! It has been 3 years, 7 months and 26 days since you last successfully posted a comment."
Now another way of saying this is I am paying 431 dollars less than the true sales price of the iphone. Or another way of saying it is, AT&T is giving me an $18 a month discount for using an Iphone on their network. All upside to me. Of course that mean I should be upset about the unlockers who are preventing them from giving me an even larger discount.
This seems to fit some other piece of the puzzle. For example, Why to UK iphones cost so much more? Presumably because of a lower subsidy. And why is apple booking the iphone revenue as deferred subscription income? Because they are probably not making any money on the sales, but on the 18$ per month.
Finally, this also helps axplain the anomolous $200 price drop. My original guess, which this reinforces, was that apple took a huge gamble on the technology. Craploads could have gone wrong. The screens might have scratched to easily, the batteries might have died prematurely, the OS might have blue screened. . So many untested things you can't really adequately Q/A before the roll out. Plus it might not have been popular. There were a few look-alikes in the pipeline, what if one had rolled out earlier?
So they had a huge risk margin built into the price. Once the risk dissipated they could remove that. But at the time this hypothesis seemed a little off. Sure a risk margin is there in any product but how could they overestimate by 50% of the propert phone price? that seems way too high. But now realize the true sales price of the phone was 1031$ and they lowered it by 20% to 831. Now it does not seem quite so absurd.
Some drink at the fountain of knowledge. Others just gargle.
Your right, I don't expect a business to act in any way that does not maximize their own profit. Nevertheless, we need to pass laws and regulations to ensure that the actions of profit maximizing corporations do not interfere with the collective well-being of society.
Property laws, Anti-trust legislation, and contract enforcement are all examples of such laws. Without such measures, free markets would barely function, let alone be optimal.
Certain types of actions, such as carrier lock-in, creating Monopoly power, and exclusivity contracts, are very often the most profitable courses of action for a company (An extreme example would be forced enslavement and wide scale theft). However, these actions leave society poorer than it would have been had these actions been illegal.
The Free Market is a mathematical ideal, described precisely in the first Welfare theorem. It is a great ideal, and one that we should strive for as an utmost priority. However, the model assumes that these kinds of transactions do not exist.
So to support a business model based on depriving consumer choice is not free-market, it's Plutocratic.
Good points, except they apply to any carrier. All carriers have coverage gaps, and having unlocked iPhones available doesn't exactly mean that problem is solved. In the US, at least, where T-Mobile is pretty much your "other" GSM option, the coverage issue certainly isn't solved.
One thing that strikes me about this product in particular is how people feel entitled to it, as though in a free market you have the "right" to purchase and use an iPhone. Like all products the iPhone has a target market, and apparently Apple has decided that its target market for this device shall be limited to the people with coverage by one of its exclusive carriers. They have the right to make that decision, just as you have the right to determine whether or not it fits your needs.
Bottom line: The iPhone isn't intended for everyone, and if you have to jump through hoops to get it on your terms, it certainly isn't meant for you. Wait a little while so the market can come to terms with how to create appropriate competing products, and buy something that actually fits your needs.
Its been nice being a loyal customter/fan since the Apple I and have given you quite a lot of money over the years. However, between the latest batch of Ipods locking me to Itunes, and now this nonsence with the Iphone, its time to part ways.
And im sure i am not the only one.
---- Booth was a patriot ----
Hmmmmm, can't you say the same about the mp3 player market and iTunes?
We're all hypocrites. We all have hidden parts, it's the contrast between them that make us more a hypocrite than others
you know, let's say the phone costs $150 to actually make in labor and parts. I dunno if it's higher or lower, that's just a guess. They'd make $250 profit on each phone. So if let's say 1 million people want an iphone. But 500,000 won't buy one because they hate AT&T. They're making $682 per person on 500,000 people and missing $250 per person on the other 500,000 people. So they're making $341 million instead of $466 million if they sold unlocked ones. That's a pretty significant loss of income!!! Whether they want to admit it or not, the profit they make per phone isn't insignificant and some people absolutely will not ever settle for AT&T as a carrier and they're losing those potential customers.
Google's Super Secret Search Algorithm: SELECT @search_results FROM internet WHERE @search_results = 'good'
I can't get over how many people think Apple should not be entitled to freedom of contract. Apple can do about anything it damn well pleases. If you don't like it, don't buy a stinking iPhone. They don't 'owe' the consumer anything. It's their goal to make as much money as possible. If their tactics for making said money are so egregious, vote with your dollars and go elsewhere. But don't talk about changing the law just because you can't have an iPhone exactly how you want it.
besides, i hate places like this, they try tell me how and with who i use my property. now the fuckers want to choose how i pay for it as well?
If you mod me down, I will become more powerful than you can imagine....
All the stuff that Apple does for every iPhone user POST-SALE costs AT&T at least that much to do for themselves. AT&T is like a silent partner just printing money. You pay them every month but otherwise you deal with Apple. Over at Verizon they are doing all the Apple stuff themselves, but doing it badly.
The complaints about the iPhone never seem to come from iPhone users. The highest customer satisfaction in phones is iPhone at 82%, the next best is Blackberry at 51%, then ALL THE REST are below 50%. Everybody is paying a similar monthly carrier fee for their phone, but not everybody is getting the same value from it. So complaints about how much money Apple/AT&T are making while offering a single phone that has both the highest customer satisfaction and the most features really seem disingenuous to me. Complain about how much companies are making for selling phones that garner http://www.google.com/search?client=safari&rls=en&q=iphone+customer+satisfaction&ie=UTF-8&oe=UTF-8
who cares about carrier lock in? Exclusivity?
ITS A DAMN PHONE.
Let Apple separate the dummies from their money. You should not legislate to prevent that as there are so many other phones and programs available. Nothing ceases to amaze me how riled up geeks get when what THEY want is limited but not when what OTHERS want is.
Yeah we need government regulation in certain cases, but this isn't one of them. Funny thing is, it may be that Apple changes the cell phone industry, just not in a way profitable to Apple. In fact Apple with their lock-ins (ipod, iphone, etc) may just get more scrutiny than they want. Being popular isn't always a good thing
* Winners compare their achievements to their goals, losers compare theirs to that of others.
Are you kidding me? Most of Slashdot is the double standard, when Apple locks consumers in to their products most of you respond by saying that they are trying to make money and do whats best for their stockholders, but when Microsoft does so they are a evil monopoly? You can't be blind enough to realize that there's no double standard, because there's evidence on every single story that concerns either Microsoft for Apple. By the way, Econ 101, when a company makes money it usually prevents another company from doing so, pretty obvious in the computer and electronics market in general. Not much of a conjecture I'd say.