Oppenheimer analyst: AT&T pays Apple $325-$425 per iPhone 3G

“AT&T is paying a subsidy of $325 for the new Apple iPhone 3G, according to Oppenheimer analyst Yair Reiner. He notes that the typical smartphone gets a subsidy of about $200. The new phone will be sold at retail for $199 for 8 GB of memory, or $299 for 16 GB,” Eric Savitz reports for Barron’s.

“The higher subsidy rate for the iPhone, he says, ‘reflects AT&T’s faith in the iPhone’s ability to attract new subs and increase ARPU.’ And he also says it has positive implications for Apple, since it effectively results in a playing field that is tilted in their favor. ‘Rivals must scramble to hit a lower, less profitable price point,’ he writes,” Savitz reports.

“Reiner also says that AT&T is paying Apple an extra $100 for subscribers signed up in Apple stores, for a total commission of $425. Reiner figures that all in, Apple is getting the same revenue for the 3G iPhone as it received for the old version, only now all the payments are coming up front,” Savitz reports.

More in the full article here.

[Thanks to MacDailyNews Reader “James W.” for the heads up.]

16 Comments

  1. iP 3G, $200
    Activation, $35
    Early termination fee, $175
    Running iP 3G on another network, priceless.

    Just kidding, I love AT&T;, but I hate contracts, unless they will adjust termination fee over time, like Verizon does.

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