Subsidies

How carriers and subsidies are more like sharks and loans

Last week AT&T's Randall Stephenson was once again repeating the familiar refrain: that Apple and the iPhone (and now other premium smartphones, like Samsung's) demand far too high an up-front price from carriers. If anyone should be charging anyone too much, dammit, it's the carriers! Jean-Louis Gassée, once of Apple, now of Allegis Capital, lays out the case for their shameless complaints in his Monday Note:

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Chinese carriers to cut iPhone subsidies with the arrival of new devices

Two Chinese cellular carriers are decreasing the subsidies for Apple new iPhone models over previous versions. Both China Unicom and China Telecom will carry the new phones, but both carriers are cutting the subsidies that they will offer with the phones, hiking up the price that customers will pay up front, according to Bloomberg.

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Could carriers rebel against the high costs of Apple's iPhone?

If a carrier, like AT&T, wants to improve profitability on iPhone sales, it has to do so by reducing the subsidy. The only way to reduce the subsidy is to get Apple to drop its pricing, or to sell at a higher contract price

Yesterday, on Wall Street, we saw something rare. An Apple analyst downgraded the stock from a “buy” to “neutral” rating. Most analysts who cover Apple are incredibly bullish. So it’s interesting to think about why this analyst, Walter Piecyk from BTIG Research, disagrees.

I haven’t seen his research report with my own eyes, so I’m relying on the good reporting done by AllThingsD here. The crux of the downgrade reasoning seems to come down to subsidies.

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U.S. Cellular says no to iPhone 4S, quarterly sales estimates say YES!

According to a report by Fierce Wireless, U.S. Cellular apparently turned down the opportunity to carry Apple's new iPhone 4S:

U.S. Cellular turned down Apple's (NASDAQ:AAPL) iPhone because it did not make sense for the company economically, CEO Mary Dillon said on the company's third-quarter earnings conference call. Dillon said that the carrier had the opportunity to sell the iPhone but that Apple's "terms were unacceptable from a risk and profitability standpoint."

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Three Mobile UK reveals iPad prices

Three Mobile UK, just like T-Mobile UK and Orange UK have released their subsidised iPad prices.

Also like Orange, Three UK are offering the 16GB, 32GB, and 64GB models of the device at subsidised

  • 16GB - £199
  • 32GB - £249
  • 64GB - £349

The monthly plan is £25/24 months for 15GB of data a month.

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Subsidized iPads coming to the UK, could the US be next?

Orange and T-Mobile UK both announced that they'll be offering subsidized pricing options for iPads purchased with their data plans. Users must agree to an 18 or 24 month contract in order to grab an iPad with the discounts, which may reach as high as 62% off retail price.

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AT&T details iPhone 4 launch, subsidies, iPhone 3GS discounts

AT&T is getting into the iPhone 4 fun today by (hopefully!) clarifying where things stand from their pricing and availability point of view. Here's the timeline:

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About that "Apple Could Drop iPad Price" Story

The Wall Street Journal today posted a comment from an analyst that Apple will remain "nimble" on iPad pricing and could lower it if demand is less than expected.

Um. Yeah. Okay. Did anyone, especially anyone who ever took Intro to Business 101, ever think anything different? Wait... Apple does.

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AT&T Offering "Loans" not "Subsidies"?

Interesting take from the Macalope this week with regards to the ongoing confusion and resentment surrounding current iPhone 3G owners and the price they'll likely have to pay when upgrading to the iPhone 3G S on AT&T. See, the Macalope believes both sides of the debate have it wrong:

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Would You Sign a 3-Year AT&T Contract to Get iPhone 3G S at $199/$299 Subsidy Pricing?

No such thing as a free lunch. You don't get something for nothing. Yesterday we linked to Gizmodo's response to iPhone 3G owners "whining" about not getting a second bite at the cheap subsidy pricing for the iPhone 3G S.

Bottom line, you got your discount last year in exchange for a 2 year contract. That contract isn't done in full yet, so you don't get a discount in full yet.

But that got me thinking. I asked this on Twitter and am getting mixed reaction, so I'll ask it here:

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