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The iPhone Is a Nightmare For Carriers
New submitter HungryMonkey writes "According to the latest EBITDA numbers from AT&T, Sprint, and Verizon, the subsidies they have to pay Apple in order to carry the iPhone are drastically reducing their profits. From the Article: '"A logical conclusion is that the iPhone is not good for wireless carriers," says Mike McCormack, an analyst at Nomura Securities. "When we look at the direct and indirect economics that Apple has managed to extract from the carriers, the carrier-level value destruction is quite evident."' So one money sucking leech has attached itself to another money sucking leech?"
http://arstechnica.com/apple/news/2012/01/82-percent-of-atts-q4-2011-sales-are-smartphones-66-percent-are-iphones.ars
Yeah. 66% of AT&T's 4th quarter sales were iPhones. I was on Verizon for years, switched to AT&T only for their iPhone, and stuck with them only for their GSM capabilities worldwide. Sure, your margins are less when you offer a better service. Would you prefer no sales though?
So my android phone is subsidizing your iphone. Nice.
I can't see the problem with this. Phone carriers, internet carriers too since many seem to be doing both, should be dumb pipes. There's no dark side to that.
A logical conclusion is that the iPhone is not good for wireless carriers
Good. Screw them. Not a single tear shed from me.
Large print giveth, and the small print taketh away
Don't carriers drop Apple? "We'll lose money on every transaction but make it up in volume" has nevevr worked.
Or, is it that profits are reduced, not eliminated? Value destruction means losing money, not reduced margins. Pretty important to distinguish. If they were losing huge buckets of money, we wouldn't see carriers clamoring to carry the devices. OTOH, selling at reduced margins at high volume can potentially be profit maximizing (e.g., Wal*Mart).
If it was a nightmare, Verizon and Sprint would not have jumped at their chance to carry it. Surely Apple would have been happy to not produce a CDMA version, if no one wanted it.
It's rent-seeking parasitism all the way down!
"When information is power, privacy is freedom" - Jah-Wren Ryel
Its an expensive phone. Are Apple forcing them to give it away? sounds more like "Carriers business model is destroying their profits"
No really, stop beating around the bush, tell us how you feel about Apple!! Jeez some kids won't grow up!
Do you know what would be really funny as shit?
If all of a sudden, AT&T, Verizon and Sprint said "enuff" and ditched the iPhone all at once, leaving it to the small regional carriers only.
"from the greed-begets-greed dept."?
Ugh.
Is there a way to block stories by editor?
Apple drug these backward-ass bozos kicking and screaming into the modern phone era, so cry my a river.
When I think of the punitive overage changes these carriers have for data, roaming, SMS texting... It warms my heart to think of their financial discomfort.
For what we pay for cell service in the US we should have a state of the art infrastructure and widespread 4G access.
Carriers are crying all the way to the bank. Anyone selling the iphone has seen their sales jump as people ditch their carriers in a mad scramble to get the hottest phone on the market.
A story came out last week detailing that Apple is now one of the biggest phone makers on the planet. This is from a company who's primary market was computers. Clearly, they are doing something right if everyone wants what they are selling.
If the carriers don't like the iPhone, stop selling it, and watch all your business dry up. That's how the free market works, capitalist pigs.
If telephones are outlawed, then only outlaws will have telephones.
Which tells me it must make business sense to do so.
#DeleteChrome
Just a matter of time. Don`t get mad at me, just bookmark this and review it in a year.
Between 2009 and 2010, Verizon (VZ, Fortune 500) averaged EBITDA service margin of 46.4% per quarter. In the first quarter that the iPhone went on sale, that fell to 43.7%. Last quarter, when Verizon sold a record 4.2 million iPhones, its margin plunged to 42.2%.
Gee, margin "plunged" from 46.4% to 42.2%. It sounds like their profits have dropped from really, really obscene to just really, really obscene. I need to get out my tiny violin and start playing it for them.
How is this Apple's fault? The carrier needs to buy the phones from Apple, and they have a cost.
In order to get people to sign up for contracts, they give you the handset at a cheaper price, but you have them locked into a 2 year (or whatever contract).
If Microsoft (or anybody else) came out with the new Super Duper Happy Fun Phone that everyone suddenly wanted ... they'd be in the exact same boat. Because most people aren't going to pay the full cost of a new phone outright. Phones have always been expensive.
Subsidizing the phone cost is a loss leader, which is exactly what is happening. However, over the next two years, how much profits are they going to make by gouging people for the wireless service/bandwidth they've signed up for? I bet it far outstrips the cost of the phones ... it just happens that a lot of people are moving to those kinds of phones right now.
The problem is that the carriers have been unwilling to invest in their own infrastructure to keep up with growth, and now they're whining that the device that people want to have costs more than they can afford in one shot.
I fail to see why Apple (or any phone manufacturer) needs to come down on the price in order to ensure the carriers make money. They can raise the price they sell the phones for, or let another company do it and lose out on the potential business.
If the carriers are giving too much of a subsidy ... well, that's kinda their problem, isn't it? Apple never told them to give it away.
I'm betting the latest, shiniest phones from Microsoft, Samsung, Nokia, and pretty much everyone else are pretty damned spendy. If you give away expensive things, that's what happens.
Lost at C:>. Found at C.
They take a service that everyone wants and many need, yet they still go bankrupt.
You and Michael Dell..
So one money sucking leech has attached itself to another money sucking leech?
It's more like a "Human Centipede" relationship.
That's basically how European telecom market(s) work. It's good for consumers, lower prices and more competition [than in the US].
Falls to "ALMOST nearly 50% margin."
Fuck me gently with a chainsaw, Heather. I fail to weep.
"Flyin' in just a sweet place,
Never been known to fail..."
The carrier subsidy on the Android phones, especially the fancy ones, also appears to be huge. An unlocked 8 GB Galaxy S2 at Amazon is $600, while a 16 GB iPhone 4S from apple is $650.
Yet AT&T charges $150 for the S II, and $200 for the 4S. So if the carrier subsidy is related at all to the gap between the contract price and no-contract price, the carrier subsidy for an iPhone is no worse than an Android phone.
So its probably not the "iPhone", but just the general trend to expensive smartphones compared with lower subsidy needed feature phones.
Test your net with Netalyzr
I work for one of the UK network operators which had made me develop a new level of hatred for iPhones.
One of the way the iPhone is hurting carriers is that Apple only offer a 12 month warranty as standard, sure you can extend it with Apple Care, but no one bothers even if they take out the iPhone as part of a 24 month contract.
A customer will phone up over 12 months into an 18 or 24 month contract to say their iPhone is faulty, all we can offer is a chargeable repair as the phone's out of warranty, naturally they're not very happy ("I got it from you, not from apple!") and they'll either want to cancel their contract without any sort of termination fee or get a working phone, 99% of the time if they complain enough they'll get a free of charge replacement iPhone just to keep them happy in the hopes that they'll upgrade at the end of their term (and it works out cheaper than having the call escalate further). This is happening hundreds if not thousands of times a day where I work, sure it happens with other brands too, but to a lesser extent and normally with lower price handsets.
I'm shocked that so many people are willing to accept a 12 month warranty on a product that markets its self as the best in the market.
And Apple could start selling phones that weren't locked to a carrier, only for real (GSM/CDMA).
The early adopters and heavy users would still buy them even at $650+, and they'd be able to switch carriers faster than every two years, on the basis of performance and customer service rather than contract expiration.
Be careful what you whine for... you just might get it, good and hard.
To a Lisp hacker, XML is S-expressions in drag.
You mean the iphone tips the balance of power away from the carriers and towards that of the phone maker and the customer? Commoditizing once ridiculously priced premium services so that they're available to the general public?
Strongest argument I've ever heard for buying an iphone. Remember when the telcos would bleed you dry for a 56kbit frame relay line or a 128kbit BRI? I just signed up for 100mbit cable internet that costs less than my old ISDN line.
It's time for wireless carriers to get some sense beat in to them and actually compete for our dollars. I am so fucking sick of these massive carriers bitching and moaning about data usage when they make money hand over fist. I'm talking 39.99/mo for truly unlimited data, text, and voice. Anything less (well, more cost) than that and it's time for some anti-trust action. Forcing users in to plans that are designed to create overage fees is the sort of thing that demands congressional action.
...the subsidies they have to pay Apple in order to carry the iPhone are drastically reducing their [insanely high, customer gouging] profits.
There, fixed that for you.
The NSA: The only part of the US government that actually listens.
...then why don't they stop insisting on restricting it, and having custom firmwares/hardwares/whatever for THEIR version of the phone, and instead simply use unlocked, stock, "off the shelf" models. Costs might go down then...
(caveat: I'm from the UK, but i hear it's generally pretty crap across the pond with mobiles)
Carriers shouldn't have any control over which phones work on their network. They should stop selling cell phones altogether.
Sell sim cards. Period. Offer some cheapo phones you don't really care about in your store. But make it obvious that users should really get the actual phone somewhere else especially if it's a smart phone.
AT&T used to sell or even rent land line phones in the early days. If you wanted a phone you had to buy one from the phone company. Today, if you want a landline phone you pick one up at practically anywhere for between 10 dollars for the cheap ones to 200 for the really fancy ones. That's what the wireless carriers need to do.
When they do that apple can't charge a fee anymore. It's just selling a phone. A bit of hardware. And the carriers aren't selling a phone. They're selling a data plan. Because I imagine that "minutes" are going to be a thing of the past at some point. At what point does it become more practical to just skype everything? Does skype cost the carriers more money then a regular phone connection? I wonder. They're obviously turning it all into data anyway. In any case, once all phones have internet the typical phone/voice connection becomes redundant. Just give everyone a data plan. People will stick to email and text most of the time to save on connection charges and that has to use much less bandwidth then a voice conversation.
Just sever the relationship entirely between phone and carrier. Sell sim cards. Then the carriers can anti trust apple or something if apple gets snippy about letting some carrier's sim cards work and others not.
I've decided to stop wasting my time responding to AC trolls/sockpuppets... so if you want a response from me... login.
...to jump on the iPhone giving apple everything they wanted and then some, but some stupid exec felt they just HAD to have it at any price, even though they were doing exceptionally well with Android phones and making way more money to boot. So, they got a few more iPhone subscribers, but now are losing money. Boo hoo. Apple needed Verizon more than Verizon needed Apple, and yet Verizon acted like the guy desperate for the girl. So, they lost. Any normal person could have predicted that action, but some overpaid executive could not. Amazing.
The problem here is that corporate capitalism has an ideological mandate to CONSTANTLY grow the business and the profits or you are "failing". This is why capitalism inevitably ends up with monopolies or pseudo monopolistic cartels.
What ever happened to making a fair profit and a decent living and calling it a day?
I will play a violin and cry for their loss.
Do not look at laser with remaining good eye.
Very little is mentioned about support costs. My experience in North America is that Apple covers it all through Applecare and their retail stores. You may pick it up at an AT&T shop, but Apple has no problem with you coming to them to resolve any issues, and is ultimately a higher quality experience. It sounds like most other phones out there are supported through the carrier which increases their costs for support personnel and warranty replacement logistics. This isn't to say that the carriers do not support the iPhones they sell, but they really don't have to go to the lengths they do for other units.
-- I have an extremely witty sig, but you're not good enough to see it.
Wow, first the RIAA complaining about unfairness, and now telcos complaining they don't make enough profit.
I think the store just ran out out of Worlds Smallest(tm) violins!
So one money sucking leech has attached itself to another money sucking leech?
You have to kill the host, it's the only way to be sure.
Mind the frickin' laser...
Apple isn't extorting subsidies, its more like apple is adding fees because the carriers are exerting market control on their products. Apple wouldn't mind selling more phone,s but AT&T and Verizon would so they lock apple into exclusivity contracts to not open their market up to the competition, and thus Apple raises their per phone charge to offset potential profits that could have been made if they sold their phone more widely.
So the carriers shouldn't be moaning at the cost, and the consumers, are not really the decision makers in this US market.
"Enjoy what you're doing! If it becomes drudgery, you're doing it wrong!" - Jim Butterfield
The carriers, now you know what it feels like to be on the receiving end. For most customers switching the carrier is not easy, not possible some times due to coverage or something. When you have them over the barrel what do the carriers do? Do they worry about being reasonable? They "maximize the profits" and ask the customers to go to hell. Well carriers, feel our pain and cry us a river.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
. . .That was sales not actual devices active. In other words because a huge number of people updated their iPhone in that time period they sold more than Android did. It didn't change the US market share makeup. Apple is still hovering around 30% and Android around 50%.
The price to a carrier of an iPhone 4S is $600* or so.
The carriers sell the 4S for $200 with contract.
Instant $400 loss.
They do this because, over the course of a two-year contract, they'll make $1700 or so, at a minimum, in monthly charges.
The reason they're all posting losses is that smartphone sales are exploding, so they're all having to eat a lot of those one-time $400 sucker punches right now. As more of their customers switch from their $50 voice plans to $80 text plans, they will start posting profits again.
Effectively, carriers are investing heavily in smartphone hardware so that they can receive a payoff in data plan charges over the next couple of years.
* Apple charges $650 for a no-contract 4S; presumably the carriers get a wholesale discount, nobody knows exactly how much.
As much as I loathe what Apple has turned into the fact that the iPhone causes trouble to carriers, who have a history of screwing with people's phones (e.g., branding) every chance they get, seems like payback which they more than deserve.
The IPhone is a total pain in the ass - just like Android is when you listen to what were previously good Linux podcasts..
All of these subsidies may cost the carriers some money, but they are costing you money as well. The carriers pay for smart phone subsidies with the price of their plans. Rather than laugh at the carriers' misfortune, you should consider this article to be an insight into why your bill is so high. People love Apple for the iPhone and hate the carriers for their ridiculous fees which is exactly how Apple planned it when they required the carriers to subsidize $450 of the iPhone 4S in order to sell it.
Many people with Androids are not using a single smart-phone feature. I guarantee you that every iPhone user is using a smart-phone feature. Apple still may have more smart phones actually used as smart phones than Android.
If I used a sig over again, would anyone notice?
Many people with Androids are not using a single smart-phone feature. I guarantee you that every iPhone user is using a smart-phone feature. Apple still may have more smart phones actually used as smart phones than Android.
And that matters why? That's actually GOOD for the carriers as people are paying for data plans they aren't using.
If this continues, phone company executives will be forced to live a life of only semi-luxury.
Come on - All of us Android users are the ones subsidizing the iPhone hipsters, where else do you think they're making up the profits?
Oh.. now I see why carriers charge for data
I see this all of the time when it comes to someone talking about Apples sales and forecasts. Do that many people get paid to pimp Apple or do these people not look at numbers and figures when they spout off claims?
The linked article in the story claims..
But users have voted otherwise, vastly preferring the iPhone, which cost the carriers more money per unit, thus reducing their profits. Android sales plummeted in late 2011, after the iPhone 4S's release -- chalk another victory for Apple's superior product and unmatched level customer satisfaction.
http://www.huffingtonpost.com/2012/01/26/apple-samsung-smartphone-sales_n_1235527.html
Apple sold 38 million smartphones and Samsung sold 37.5 million smartphones in in 4th qtr 2011. I'm sure not all of Samsungs smartphones were andriods but there are other companies making them as well and I'm sure all of the others combined was a decent amount. To draw the conclusion that "Andriod sales plummeted" and people were "vastly preferring the iPhone" over other smartphones in that time frame is completely false and not even stretching the definations of those terms should someone arrive at that conclusion. These falsehoods get repeated and stated over and over and I guess without looking at numbers, it just becomes a true statement? What about the rest of the year where Samsung had more smartphone sales than Apple? If Apple had more sales the 4th quarter because of what the author states is a "superior product" and "unmatched customer statisfaction" is that the same exact reason Samsungs sales the first three quarters with smartphones was higher than Apples? How does one arrive at those conclusions? I know, because every one else does without looking at the real numbers and reasons.
Sure, your margins are less when you offer a better service. Would you prefer no sales though?
Sprint announced a large upswing in new customers last quarter -- all because of the iPhone. However, their losses increased, too -- all because of the iPhone. If the carriers lose money because of the iPhone, then yes, no or lower sales would be preferable.
Carriers were too eager to get the iPhone, so they naturally found themselves in a disadvantageous position. What they should do is stop carrying the iPhone, and if too many carriers drop it then Apple will start losing sales and start getting desperate, then they'll be forced to offer their phone at a lower cost.
Tough luck. Nobody forces you to do that, you know? You entered a business deal, it turned out that it is still profitable(!!!), but not as lucrative as you had hoped or as you have it with other deals.
Stop whining.
Assorted stuff I do sometimes: Lemuria.org
Its leaches all the way down.
Sprint announced a large upswing in new customers last quarter -- all because of the iPhone. However, their losses increased, too -- all because of the iPhone.
The losses are a single quarter. The revenue the new customers bring lasts for two years.
And after that there's a great chance Sprint gets to keep them as customers (if they manage things well).
So it can make a LOT of sense to take some loss now for quite a lot of potential future gain (and a lot of the gain is not just potential, but pretty much assured).
"There is more worth loving than we have strength to love." - Brian Jay Stanley
They do lose some up-front though.
No.
They may incur more debt up front but they have contractually obligated payments that ensure they have not lost anything, at any point. If you sign up for Sprint today, get an iPhone, and cancel your contract in a month Sprint is still paid more than the iPhone cost by your termination fees.
They do record a loss in one area but that's all accounting fluff that doesn't really indicate how much they have actually lost, you'd have to also look at the contracts and subscriber base as assets (which they are).
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Their products are OK but the underlying business practices taint the name, it seems there are worms in the Apple and it isn't so sweet to bite a piece off.
Slave trade, Over priced, monopolized, but if you're a stock holder and you ave no shame congrats!!!
"If any question why we died, Tell them because our fathers lied."
If someone's asking for advice when it comes to what phone to go for I'll generally steer them away from the iPhone anyway unless that's what they really want, the phrase "you're paying for the name" comes up a lot :)
For the average non-technical user you are doing them a huge disservice. Normal people cannot manage virus scans and process monitors needed to keep an Android device running well. It's not even like the contract is any cheaper with another brand of phone, so how are you "paying for the name"???
Do not let your own dislike of Apple lead you to steer your customers into torment.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
A quick comparison shows similar subscription plans cost the same regardless of iPhone or similar capability Android is bought. If Apple charges such premium of the carriers, shouldn't the rest of us realize reduced subscription cost??? What IS the value-proposition the carriers add beyond "dumb pipes"?
Yeah, and at 4am local, you might even get 100 mb. In the evening, when all the other cable subscribers are on, getting 100mb is going to be quite unlikely. Cable companies, just like phone companies, habitually oversell their capacity.
I've fallen off your lawn, and I can't get up.
You have any facts to back that up? It's almost impossible to have a smart phone these days and "not use a single smart-phone feature". Your logic makes no sense considering every Android phone has to have a google account attached and requires you to register over the internet, automatically pulls your gmail email, automatically uses the android market for updates etc. These are "smart-phone" activities.
I buy a phone. Who cares what type. I go to my carrier and subscribe to a voice/data plan. They give me a SIM and I plug it into my phone. They don't know what brand. The phone manufacturer doesn't know from whom I'll be buying my bandwidth. Nobody kicks money back to anybody. Everybody makes money based upon the value of their product or service.
End of story.
Have gnu, will travel.
You have been found in violation of Microsoft's NDA. Expect black vans to pull up at any moment, you're going where we put Microsoft Bob.
On a more serious note, has anyone bothered to look up the unsubsidized price of the original phones when cell companies began to subsidize phones, and adjust that for inflation? When paying well over $2,000.00 over the course of 2 years for a phone and service, after having put in an initial $199 or $299, the idea that the carrier may have spent $300 or $400 on the phone isn't going to make me weep for them.
Dear heavens.
As far as I can tell, Apple is NOT taking a chunk out of the carrier's monthly fees. But to sell the more expensive phones, they have to give bigger contractual discounts. With the fees they're charging, it might take six months for the monthy fees to accumulate to be equal to the subsity. It may take the entire contract period for the profits from the monthy charges to be equal to the subsidy. That may be a long time, but it's only a quarter of the contract period, and meanwhile, they're raking in better volume profits because the iPhone sells so damn well. Of course, more phones means more network congestion, but the congestion is just a result of the carriers cheaping out on infrastructure. It amazes me how whiny the carriers are given the huge profits they report every quarter.
Great fleas have little fleas upon their backs to bite 'em, And little fleas have lesser fleas, and so ad infinitum.
And the great fleas themselves, in turn, have greater fleas to go on;
While these again have greater still, and greater still, and so on.
-- Guy Inawig
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
It's leeches all the way down anyway ;)
A successful API design takes a mixture of software design and pedagogy.
Whoever wins... we lose.
Glad I could help.
I'm more concerned with who has more smart phones that are used to spread PB & J on bread to make sandwiches.
What do you really care about? The actual marketshare and make up of the market, or just some pissing match to find a way to make your brand come out on top? I'm considering adding this to the list of topics not to discuss at a dinner party: politics, religion and Android vs. iPhone (really just brand loyalties).
Well, what they operate is like a series of tubes.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Sales is what market share IS. What you're talking about is installed base. People have been complaining one way or the other about which one "matters" for as long as I can remember, and likely a lot longer than that.
Would they prefer carrying Blackberrys instead?
...is going to net out being a loss-leader.
All that these sales are presently doing is bringing cashflow in the door without consideration for what happens in the end when the Piper comes for his due. The people "in charge" who made the decisions to carry such loss-leaders to such extreme volume in the first place already know that they themselves will be cashed out and long gone from the carriers' employ when the inevitable time comes, then it will become "someone else's" problem to have to deal with.
Many people with Androids are not using a single smart-phone feature. I guarantee you that every iPhone user is using a smart-phone feature. Apple still may have more smart phones actually used as smart phones than Android.
Actually the opposite is true. Most Iphone users tend to use it as a dumb device compared to Android users who tend to use more features.
It's just that Android has more features built in, rather then having to be made up by third party applications.
Calling someone a "hater" only means you can not rationally rebut their argument.
Yes. This article explains that the carriers have gotten to the point where they give away Android phones for free. Soon, all of the phones will be smart phones and feature phones will go by the wayside, but that doesn't mean the users will use the phones for more than making phone calls and texting.
If I used a sig over again, would anyone notice?
This article is just isn't true. There is about $50 per 2 years difference in the subsidy for Apple vs. RIM, Windows, and Android. That's real money but it doesn't kill the margins. Right now the carriers are moving huge numbers of people over to smart phones, but they account for the smart phone subsidy as an immediate loss. The subsidy issue will go away once the number of smart phones stabilizes which should be in about 3 years.
As far as the infrastructure improvements that's a much bigger problem. And certainly Apple is driving that since it drives up data usage. And the move away from unlimited is because the new generations of smart phones use much more data.
$800 + unknown service cost + freedom to leave the service at any time.
or
"free phone" + about $2000 + $400 early termination fee
also, with the first plan you choose from hundreds of thousands of models. the second, "subsidized" model means you pick from a few carrier branded locked down phones with unremovable apps.
There's a reason most of the world has picked option 1. The only reason Americans aren't on this plan as well is because they're so uneducated they only see the "free" and think "Hah! they paid for my phone! I totally came out the winner in this deal!".
Are you implying that Apple users are more tech savvy or that somehow people who purchase an Android phone only know how to text and phone people? The last feature phone I owned was a Sidekick XL so it has been a little while and I know feature phones can now access basic email but really, you're arguing that the people who are paying 20+ USD a month and NEVER uses the internet? Yeah, I don't think so. Apple does firmly have the lead in sales of apps but I would argue that Android because it has a larger hobbyist base they tend to introduce apps that don't cost anything rather than .99 cent apps. I could be wrong, it is merely anecdotal.
Also to the AC - normally "market share" is defined as the share of the market they own or have installed into. If it's a quarterly report of sales they'll say quarterly market share. In other words the numbers day to day are fine but the numbers overall are more indicative of the health or strength of a brand/OS.
The answer, I think, is “Not many“.
in the source equate to actual statistical value? The entire article is speculation and "my friend thinks".
Thanks for the interesting reply; I think this cuts to the heart of things.
People see value without effort as unfair, and yet everyone is striving to attain this.
In Europe, people buy their phone at true market prices. iPhone 4s is starting at 629 euros = 833 US$ in Germany.
Telecoms gives little discount on longer contracts. But contracts are cheaper. In Europe you only pay for outgoing calls.
6 hours talk, 6GB data, unlimited SMS/MMS, free calls to the same providers subscribers: Typical price is $26/mo on most prepaid providers.
3 hours, 3GB data, unlimited SMS/MMS, free calls to same providers subscribers is around $18/mo.
After hitting data max, speed will be throttled from 4Mb/s (limit on theese small packages) to 128 kbit/s. No extra charge.
If you attach blood sucking leeches to each other till you join the first the last in a complete circle, you have a pretty good representation of the current global financial markets.
After logging in slashdot still does not take you back to the page you were on. It's been that way for 20 years.
> is it that profits are reduced, not eliminated?
Succinctly put: Thugs (carriers) love making money, however they hate it when someone else (Apple) out-thugs them for a larger share. They're throwing a tantrum.