Everything subsidies
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.
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
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
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
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:
Monday, June 7 –
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.
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
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&T and other carriers subsidize the upfront cost of the iPhone and other smartphones and make up the difference via guaranteed long term contracts/commitments. That's their business model, but it
The original iPhone 8GB launched with a hefty $599 price tag, though it dropped to $399 a short time later. Though contract details were never disclosed, some pundits and analysts
