This money amounts to WAY more than the initial price of a phone paid by ATT to Apple. (This is why Apple will usually sell you a new phone at the subsidized price if yours is stolen. They make only 20 or 40 bucks on the subsidized price, but they maintain that ATT revenue stream.

This may also be why Apple is so fast and free with replacement phones at the Genius bar.

Far more obscure (at least as far as reported in the Apple 10Q is the warranty return rate and the cost there of. The massive numbers of Refurbs being shoveled out the doors of Bestbuy, ATT etc for $99 serve to mask warranty costs, by recovering at close to 60% of the cost on most warranty returns.

These refurbs allow ATT to go after the low end customer.

I would hope that the iphone outsold a completely brand new product that RIM put out. It had no following other than people 1. Crack addicts and 2. People who didnt want a lame phone on Verizon (which god…they have so many lol). The Storm is a completely new product, succeeding and failing in certain areas. You cannot deny that even with the negative attention it has done well.