Phone companies lose $400 for each iPhone sold

[King_Jay16]

Turns out your carrier is actually losing money on that exorbitant iPhone contract you just signed. Apple charges carriers so much for the privilege of selling iPhones that service providers can't turn a profit. The 4S that cost you $200? AT&T paid around $600, eating $400 every time you upgrade. It's proving to be a lousy business model for phone companies, and is raising red flags on Wall Street. "Can Apple continue to roll through industry after industry, soak up all the profits, and leave everything it touches as a smoking wreckage?" one analyst asked in the Los Angeles Times. "They've done it with music and handsets, and now they're doing it to the carriers."

SOURCE


wow.....

[ShadowWolfe Hellscream]

Think I read somewhere that the carriers don't make money on the sale of iPhones, where they actually make their money is in data plans and services for the device.
I think if this model was a failure after the 1st, 2nd or even third year, they wouldn't have continued with it and another contract for another 4th, 5th and undoubtedly 6th year?

[King_Jay16]

Think I read somewhere that the carriers don't make money on the sale of iPhones, where they actually make their money is in data plans and services for the device.
I think if this model was a failure after the 1st, 2nd or even third year, they wouldn't have continued with it and another contract for another 4th, 5th and undoubtedly 6th year?

Yea they make money off the data plan and also the fact they lock you in a 2 year contract in USA and 2/3 years in Canada

[Skele Drew]

Hmm. Interesting thing to know. Staying even farther away from crApple. But obviously they're making loads of money in the long run from the contracts, else they wouldn't've kept doing it.

[King_Jay16]

Hmm. Interesting thing to know. Staying even farther away from crApple. But obviously they're making loads of money in the long run from the contracts, else they wouldn't've kept doing it.

Its a honey pot for them especially with the data plans...

[NOKIA 3650]

"Can Apple continue to roll through industry after industry, soak up all the profits, and leave everything it touches as a smoking wreckage?"

Hell Yeah, and the truth is that the loyal consumers will allow them to continue getting away with it too. It amazes me to this day that no matter how expensive Claro's iPhone data plan was, I personally knew 9 individuals who kept renewing their $4,375 plan every month. At first I laughed at the thought, then I realized that I'm still subscribed to Digicel's MiFi service at near similar rates