Bernstein’s Sacconaghi: AT&T subsidy would dramatically boost Apple iPhone unit sales

“What happen to Apple iPhone sales if AT&T subsidizes the cost of the phone for subscribers? The answer, says Bernstein Research analyst Toni Sacconaghi, is that they would sell a lot more phones, to the benefit of both companies,” Eric Savitz blogs for Barron’s.

MacDailyNews Take: Eric and Toni obviously have each other #1 in their Fave Fives. Get iPhones, guys.

Savitz reports, “As Sacconaghi notes, there has been recent speculation that AT&T will provide a $200 subsidy for the pending-but-unannounced 3G iPhone, bringing the phone’s cost for consumers down to about $200. (Current models are priced at $399 and $499.) In a research note this morning, Sacconaghi took a look at what would happen if AT&T does choose to subsidize the next generation iPhone – and why it makes sense for both sides.”

Savitz reports that Sacconaghi “thinks that it is realistic to think AT&T’s iPhone sales could easily double with a $200 subsidy.”

“Sacconaghi says a jump in iPhone sales would likely cannibalize sales of the iPod Touch [sic], which is sold at price points of $299, $399 and $499. But he adds that the overall impact would be positive, since the iPhone is more profitable for Apple than the Touch given the fees the carrier pays back to Apple,” Savitz reports.

More in the full article here.

“Research note?” Give us a break. Wherever the wind blows, Toni goes. And Eric just can’t wait to blog it. This “AT&T subsidizing iPhones” is currently just a rumor. That, and a bunch of idle speculation, will get you an analyst job and an article on the Barron’s blog site, but it certainly won’t give you any meaningful investment advice.

21 Comments

  1. I don’t like this rumored unilateral move by AT&T;. They are about the worst partner that Apple has. They made the stock tank earlier with a misleading iPhone sales announcement. And they do less than nothing to promote the phone itself. When you walk/drive by an ATT store, you can’t even tell they even sell iPhones, although every other phone they carry is full “posterized” inside and out. I hope that Apple gets out of this contract with ATT and never looks back.

  2. So, what all this BS about subsidizing the iPhone means is:

    A bunch of morons that think the iPhone should be treated like a Razr are going to focus on subsidizing it, even though nobody has a good reason to believe this will happen… and when it doesn’t happen the stock is going to drop.

    Apple should and will treat the iPhone like a computer (which it is), and not like a cell phone.

    This is like saying Skype should subsidize MacBooks.

  3. It doesn’t make sense to expect subsidy from AT&T;in addition to monthly sharing with Apple. It will be one or the other, not both. Apple wants the sharing, so I expect that to remain. It eliminates the devaluation of the hardware and it give Apple income to cover updates under Sarbanes-Oxley.

    Besides, all of this talk is pure speculation. We don’t know what agreement Apple and AT&T;have for next iPhone, but this issue is covered, that is for sure.

  4. Wow! Did you hear that Skype is going to give a $800 subsidy for MacBooks? That will cause Macintosh sales to skyrocket! Now if we could just get NBC to subsidize iPods, Apple might have a future!

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