AT&T Subsidizing iPhone 3G By $325
According to Oppenheimer analyst Yair Reiner, US carrier AT&T is subsidizing the iPhone 3G by $325, not $200 as previously suspected, placing Apple’s total cost for each device at $525 for the 8GB and $625 for the 16GB. In addition, he also states that AT&T is paying Apple an additional $100 for each iPhone 3G that is sold in Apple Stores for unknown reasons.
Normally, most smartphones are subsidized by around $200, making the iPhone’s subsidy unusually high, which he says, “reflects AT&T’s faith in the iPhone’s ability to attract new subs and increase ARPU.” He also notes that it could be good news for Apple. “Rivals must scramble to hit a lower, less profitable price point,” he writes. He says that with this new information, it now appears that the iPhone 3G could be as profitable as the original, and with payments up-front.
Because of this, he is maintaining his estimate that the iPhone will reach 15.2 million units sold by the end of this year, and 33.2 million by 2009.
[via Tech Trader Daily]