“But Monday’s trades came after a rough ride for Apple, which has now lost more than 12% since topping out at $644 on April 10, as concerns have risen in the market both from the technical side as well as some dynamics for the company’s lucrative iPhone business,” Gallagher reports. “One factor weighing on the stock is some worry that wireless carriers will start pushing to lower the subsidies they pay to Apple to sell the iPhone, which some analysts estimate at more than $400 per device (on top of the $200 that a customer pays with a two-year contract).”
Gallagher reports, “In a note on Monday, BMO Capital Markets analyst Keith Bachman told clients that a $100 drop on the iPhone subsidy would hurt Apple’s earnings-per-share figure for fiscal 2013 by $7.50… The telecommunications team at Macquarie also address the question, saying the iPhone subsidies will not likely change in 2012, given that the carriers do not have a lot of viable alternatives and would risk losing share to their rivals – unless all three acted in some sort of collusion to change the subsidy.”
Read more in the full article here.
MacDailyNews Take: In other words, unless the U.S. carriers act illegally, then “concerns” about Apple “subsidy declines” are baseless.
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