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

that math is wrong

[G Fab]

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.

Re:that math is wrong

[dedazo]

The math is not wrong. Apple gets $831 from each iPhone. That doesn't mean it profits $831

Then perhaps the obvious flamebait headline should have been crafted to reflect that simple fact. But in the age of one-liner evangelism, Apple Makes $831 Revenue (Though Not Really Profit, Mind You) On Each AT&T Phone Although That's Pretty Much Irrelevant To Everything, We're Just In It For the AdSense Revenue just doesn't work.

I'm having trouble trying to understand the mindset of people who think $831 or $8,311 represents "greed". If the market will bear it, that's the correct price. Otherwise Apple would have sold 1,000 iPhones instead of 100,000 or however many they've shipped so far.

Re:that math is wrong

[eclectic4]

" And that's a fair move in capitalism. If a vendor I use is making a 15% markup, that may well be completely fair and just. If he's making a 75% markup, I want to know about it, and I'll certainly try to prevail upon his better nature or take my business elsewhere."

You don't understand... if something is marked up 75%, there most likely isn't business elsewhere. Is someone else selling iPhones besides Apple? Are they cheaper? Get the picture? If I told you Oil was being sold at a 100% markup, are you going to trade in the car for a bicycle as a show of "taking your business elsewhere?" No. You are either going to buy this "widget" for "this price" or you aren't. Supply and demand set the price, not it's known markup. If you are going to use markup in your purchasing decisions, know that it will have zero effect on everyone elses purchasing tends, and therefore will do nothing more than satisfy your strange needs to not give too much profit, even if demand supports it.

Good luck.