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Oppenheimer Says AT&T iPhone Subsidy Is $325

Oppenheimer Says AT&T iPhone Subsidy Is $325

Posted June 19, 2008 at 4:48pm by iClarified
AT&T is paying a subsidy of $325 for the new Apple iPhone 3G, according to Oppenheimer analyst Yair Reiner. He also noted that the typical smartphone gets a subsidy of about $200. Apple and AT&T will sell the 3G iPhone at retail for $199 (8 GB), or $299 (16 GB).

The higher subsidy rate for the iPhone, he says, “reflects AT&T’s faith in the iPhone’s 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.

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Oppenheimer Says AT&T iPhone Subsidy Is $325
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Comments (2)
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Number_41 - June 19, 2008 at 8:32pm
This is about to become the worst partnership ever. N41
flowerinline - June 19, 2008 at 5:15pm
We are millions round the world that would buy the iphone without contract so Apple would have much more profits than with its partnership with AT&T, I really do not understand their strategy.
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