Apple made AT&T(T)the exclusive provider for 5 years because they (APPL) receive $10/mos per subscriber from T + all ringtone rights (read this avg's $60+/yr per subscriber, although I find that a wee bit high). So think about that revenue stream.....just in 3 days = 500K * $10 = 5 million (free cash) to AAPL per month (not including the 9.5M units they are projecting to be sold by June 30,2008)! Why would T agree to a contract like this?? T has $0 cost to acquire new customers v. the industry average of $135 and I presume they still make profit on the monthly sub. fee (less $10).
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Apple made AT&T(T)the exclusive provider for 5 years because they (APPL) receive $10/mos per subscriber from T + all ringtone rights (read this avg's $60+/yr per subscriber, although I find that a wee bit high). So think about that revenue stream.....just in 3 days = 500K * $10 = 5 million (free cash) to AAPL per month (not including the 9.5M units they are projecting to be sold by June 30,2008)! Why would T agree to a contract like this?? T has $0 cost to acquire new customers v. the industry average of $135 and I presume they still make profit on the monthly sub. fee (less $10).