3 ms·

The cheapest phone that launched was $549 so your estimate is wildly off base. The average selling price was likely closer to $700.

• mikeash 13y ago
  Does the carrier subsidy count up front, or does it trickle in over time? Getting very tangential here, but that question occurred to me and I don't know how it works.
  • jonknee 13y ago
    They account for it over time ("subscription accounting), but I believe get it all at once. It's goofiness required for GAAP accounting IIRC. This is why carriers often post lousy numbers after a big launch even though it means a lot of future revenue--those $350 subsidies add up quickly.
    • mikeash 13y ago
      That's pretty wacky. So from an accounting perspective, the money just disappears for a while? If the phone companies have to post the loss immediately but Apple posts the earnings over time.... Not saying you're wrong. The world of accounting is just odd sometimes.
      • jonknee 13y ago
        It doesn't disappear, it's noted, but just not counted as received. It is wacky, but makes some amount of sense and makes revenue more even. It helps lessen the incentive to stack a quarter with revenue even though it starves the next quarter (someone else's problem). It seems to relate with software updates being assumed: http://appleinsider.com/articles/09/10/21/inside_apples_iphone_subscription_accounting_changes http://appleinsider.com/articles/09/10/21/inside_apples_ipho... > Based on research into what allowed this to happened, the Sarbanes-Oxley Act was instituted to require certain minimum standards of financial accountability. Among its many rules is a provision that states that companies can't immediately book revenue for a product if the complete product has not yet been fully delivered.
        • mikeash 13y ago
          Appreciate the info, always nice to learn new things.