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I believe, besides the great success that Apple has with its mobile devices, the most interesting here are the enormous sums the mobile carriers are spending to
by fpp 15y ago
I believe, besides the great success that Apple has with its mobile devices, the most interesting here are the enormous sums the mobile carriers are spending to subsidize this growth - up to US$300 per device.
This is certainly not something they can sustain much longer at these levels and also cross-sponsoring Apple devices by all their other phones (mostly Android) will not stretch this much further.
I guess we've just seen the peak of that where both Apple & the mobile operators had underestimated demand.
The most likely outcome of that will be that the mobile operators might start selling new Apple devices at their true cost - i.e. those will become substantially more expensive for the consumers with a market saturation happening / having already happened at the same time - or in other words - less phones with similar income for Apple but consumers not buying a new Apple phone every year.
- schraeds 15y agoThe average contract revenue for an iPhone user is around $2,000 ($100x24 months, give or take). The average subsidy for iPhones is more like $450 per phone (thus the Apple unlocked price of $600+ for unsubsidized phones). 15% of contract value to subsidize the hardware doesn't seem that bad. I wonder how much cable companies pay for set-top boxes, Vonage with free VOIP adapters, etc.
- mediocre_coder 15y agoI worked on digital set-top boxes about 10 years ago, at which point they cost ~ $800 per unit. I'm sure that's declined to $2-300 by now, but cable co's were recouping at $800/unit with expected lifespans of ~ 5 years.
- just_browsing 15y agoDigital STBs were around $800 a decade ago, and have probably declined to a couple hundred dollars at this point. The cable companies didn't have any trouble recouping on them, they just tied the high end boxes to high-end plans (e.g. HD only, back in the early 2000s when not everyone had HD). It strikes me as remarkably parallel to how the phone companies are handling smartphones today, bundling them with premium-level services.