“Those negotiations will help determine how large a slice of U.S smartphone and tablet sales goes to Apple and how much goes to its rivals and carrier partners,” Shinal writes. “‘Some carriers changed their upgrade policy,’ Cook said on the call, after revealing that the company’s iPhone sales contracted in the U.S. during the quarter ended in December. The carriers ‘stretched the time out to 24 months,’ before allowing users to get newer iPhones either for free or at nominal cost, whereas many users previously received subsidized devices just 20 months into their service contract.”
“The hardball tactic by the wireless giants may help explain why Apple’s revenue forecast for the current quarter was much weaker than Wall Street expected,” Shinal writes. “Android phone makers can now offer a mobile browsing experience that’s good enough for most smartphone users, a market reality that’s weakened Cook’s hand in the negotiations, judging by his comments.”
“Apple, of course, has its own cards to play in subsidy negotiations covering the U.S. mobile market, where Apple smartphones and tablets are the leading driver of mobile commerce, according to Cook,” Shinal writes. “The CEO quoted comScore research figures indicating that iPhone users conduct 54% of U.S. smartphone browsing and 78% of tablet browsing.”
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