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

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

[attemptedgoalie]

iPhones are magic, and you know it. :-)

Ok, you're right. That is, unless Apple is using Oompa Loompas to make them. Then, they might be free. The materials are all derived from recycling old Newtons and glued together with the tears of Apple fanatics upset about the $200 price drop.

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.

Re:that math is wrong

[GaryPatterson]

(Irritating teenager in an Apple store grasps for iPhone, bugs parents and then just takes one from the stand.)
(Lights flash, teenager freezes mid-grasp.)
(A group of small, odd men enter from a previously unnoticed doorway under the iMac stand.)

Oompa Loompa doopity do
I've got an iPhone here for you.
Oompa Loompa doopity day
Sign here and here and take it away.

What do you get when you follow a craze?
Buying everything to the end of your days.
What do you do when you're nose-deep in debt?
You will pay all your wages, that's a certain bet.

I don't like the look of it.

Oompa Loompa doopity dah
If you are cautious you will go far.
You can live in happiness too
Without credit like the Oompa Loompas doopity do!

(Irritating teenager is sucked down a pipe, parents watch in horror and are led away by an Oompa Loompa)

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.

Someone has to say it ...

[lotsofsand]

You're clearly comparing Apples and Oranges here.