True but AT&T gave Apple a chunk of the service fees. If Apple had had to sell the phone alone the cost would have been much more expensive. Plus within a year

True but AT&T gave Apple a chunk of the service fees. If Apple had had to sell the phone alone the cost would have been much more expensive. Plus within a year they were selling the most expensive at about $399. A price that was competitive with the high-end phones at the time. It was estimated that apple averaged about $450 payment from ATT per phone. So users were paying way more for the phone than they thought. The iPhone was profitable from the start or very close to it. It really was a genius move by Steve.