The higher subsidy rate for the iPhone, he says, reflects AT&Ts faith in the iPhones ability to attract new subs and increase ARPU. Reiner says this results in a playing field that is tilted in Apple's favor. Rivals must scramble to hit a lower, less profitable price point.
Reiner also states that AT&T is paying Apple $100 for subscribers signed up in Apple stores, for a total commission of $425. It seems that Apple is getting approxiametly the same revenue as with the original iPhone; however, now payments are coming in upfront.