5 ms·
There's not as much profit as you'd think. And a lot less than lower priced phones from other manufacturers. Plus, the carriers have to assume a ton of risk b
by JohnTHaller 13y ago
There's not as much profit as you'd think. And a lot less than lower priced phones from other manufacturers. Plus, the carriers have to assume a ton of risk by agreeing to buy millions of iPhones whether they sell or not. Verizon had an estimated shorfall of $12-14 billion dollars as of July of iPhones they'd have to buy even though they didn't have the sales to warrant it. Not sure how that would up.
- huxley 13y agoThat shortfall was predicted by one analyst and it never occurred: http://www.mondaynote.com/2013/12/15/shameless-carriers/ http://www.mondaynote.com/2013/12/15/shameless-carriers/ http://www.verizon.com/investor/secfiling.htm http://www.verizon.com/investor/secfiling.htm
- JohnTHaller 13y agoAh, thanks. Wasn't aware of that.
- smackfu 13y agoI was thinking more like this... Currently, AT&T charges you $199 for an iPhone 5S, then has to cover $19 of subsidy over the 24 months of the $80/month contract. A new carrier could charge $99 for an iPhone 5S, and make a huge splash. That would require another $4 of subsidy per month, but it would be pretty easy to just raise their plan to $85. Since they aren't just a retailer selling a single product once, it's much easier to move costs around. Similar to how a car dealer can play games with funding to make a car cost less but not really cost any profit.