“If Apple ends its exclusive carrier agreement with AT&T next year, it will likely mark the end of its estimated $450 carrier subsidy for the iPhone, a new analysis has forecast,” Sam Oliver reports for AppleInsider.
“In a new note to investors, analyst Brian Marshall with Broadpoint.AmTech said that the ‘sweetheart’ carrier subsidy provided by AT&T for the iPhone would not be attainable with Verizon. He believes that the iPhone will be added to the Verizon network in the second half of 2010, but not without consequences,” Oliver reports.
“A non-exclusive iPhone, Marshall forecast, would command roughly a $300 carrier subsidy,” Oliver reports. “But he believes that any losses would be made up in volume, as Verizon is predicted to sell roughly 14 million iPhones in the 2011 calendar year. With an average selling price of around $500, that would be another $7 billion in revenue for Apple.”
More in the full article here.
Not holding my breath.
Perfect timing. I look forward to leaving AT&T;and their lousy 3G network.
This is just smoke to try to stop the bleeding at Verizon….
Apple can suck another 14 to 15 million users off of Verison over the next 16 to 18 months so why why spend the money and R&D;time to make a phone that will only work on Verison.
iDon’t THINK so.
What’s the subsidy in counties with multiple carriers? I’m certain Apple has Verizon’s tiny balls in a bigass vise.
@Whatever:
I’d have to agree with you on this one. I just can’t see apple moving the iPhone to a CDMA technology. CDMA is dead. Verizon’s 4G or LTE network is only in the testing phase. Full deployment, if my memory serves me, won’t happen until 2012 at best.
Simple math implies that if the subsidy went down by $150, retail price would go from $200 to $350. How many more people will NOT buy the iPhone if it were to sell for $350 instead of $200? I doubt that the number of people who would NOT buy the iPhone while it’s only on AT&T, and would be willing to spend $350 on Verizon would make up for the number of new customers lost due to that increase in price.
There is an increase in noise regarding Verizon and iPhone. I have always found it very difficult to believe Apple would ever bother. It is still struggling to keep up with the demand; it still doesn’t need one more outlet to sell (presumably) even more devices, since they can’t even make enough as it is.
I just don’t see it anytime soon.
Apple will not be taking the iPhone to Verizon. T-Mobile maybe, but not Verizon. Insulting the iPhone with the Droid advertising almost assures that Steve Jobs will keep the iPhone away from Verizon.
There is no way Apple would create a CDMA device. The rest of the world is on GSM.
Let me say this again. The REST of the world is on a GSM network.
I don’t even see Apple adding the frequencies needed for T-Mobile 3G network.
I want to be an analyst so I can get paid for pulling shit outta my ass!
What do you get when you listen to / follow analyst advice? Dell.
The rest of the world is on gsm … BFD. If they want more market share, they will do it. At&t;will be changing frequencies … so that means the current ones are dead. Same type of stupid analogy. If it is cost effective to apple, then they will do it. The radio part is just not that tough.
Silver I think they are ‘claiming’ “20 or 30 LTE markets won’t be ready until the second half of the year, and complete US coverage won’t be attained for another five years.” The extra 6 month wait for the frequencies probably didn’t hurt them, just made their schedule more realistic. Either way, cdma radio will be needed to do it right (might explain the job posting for a cdma guy on apples site earlier this year).
The “analyst” in question is making stuff up. If Apple were to release an iphone for Verizon next year, they would have to include CDMA, since VZW’s 4G network isn’t close to sufficiently built out to rely upon it 100%. That means building in and certifying a whole new RF section for a limited time and limited market. Plus, CDMA doesn’t allow voice and data over the same call; so, you’d have an iPhone that doesn’t work like other iPhones do. That’s a cardinal sin. Can anyone really see Apple saying: “Sorry, this app won’t work for you because you have a Verizon iPhone”?? Not likely. It would cripple the seamless user experience.
The missing year from the above post is 2010 … sorry
I love how some think that just because Verizon “supposedly” insulted Apple that Jobs would cut off his nose to spite his face!
The first thing Jobs did after returning to Apple was to brace Microsoft!
This is business gentlemen it’s all about the Benjamins.
As a shareholder, I would like a piece of that seven BILLION in additional revenue.
When you set out to conquer the world, you can’t ignore those who would insult you.
Just switched to AT&T;from T-Mobile so I could get an iPhone.. and I have to say.. the dropped calls you get with AT&T;are ridiculous. While I can deal with it with my iPhone.. my wife is pretty pissed that I switched us from a reliable network to one where she gets at least 1 dropped call a day. My fear is that AT&T;isn’t going to put in much effort to fix the problem as people obviously don’t care enough to stay away from their services.
AIN’T GONNA HAPPEN! iCal it!
Verizon told me (a FIOS customer) point blank that they are getting the iPhone in January!
Either this guy is wrong or Verizon is deliberately lying to their customers to keep them from leaving.
Yet another example of an “analyst” who never went to business school, knows shit about supply and demand, and would probably be waiting tables at Applebee’s if some even dumber SOB didn’t hire him as an analyst.
You cannot raise the price of an item by 50–75% and expect your sales volume to increase. End of story!
@ SammyP
Thank you, someone get’s it.
Verizon is not better than ATT, that’s the other important point to note. Who cares about Verizon? Financial analysts, Vodaphone, and Verizon users that are too afraid to switch to ATT and thus keep bad mouthing ATT (and using the wonderful BB Storm) and who do not have an iPhone now. I switch to ATT for the iPhone and I have been very happy. And by the way, the rollover deal is better at ATT for left over minutes.
Verizon still has many users and it is not a crisis for them. They just don’t have the iPhone. I hope they do not get it, to tell you the truth.
Early on, it was widely reported that ATnT had a 5-year exclusivity contract with Apple for the iPhone. It supposedly has never been confirmed, but now I’m wondering if it technically is true for other reasons. With Verizon rolling out their LTE network come 2012, that would essentially be the earliest they would even be capable of supporting the iPhone (short of Apple making a CDMA version, which is NOT going to happen) and coincidentally, 2012 would be the 5-year mark of the iPhone’s introduction and ATnT’s “exclusive” access to it.
So, why is Oliver saying that the subsidy would go down?
Unlike the introduction days when Verizon could (with an arrogant smirk) say “take a hike,” the iPhone is much too popular now to turn down.
Just say to Verizon and others now, “You want it? This is what it cost.”
If they take it, go back to ATT and say the same.
If not, stay with ATT.
Yep. agree. No Verizon iPhone for at least 1-2 years. Hey, maybe everyone BUT Verizon….. LOL
Just a thought,
en
I don’t understand all these people saying they get dropped calls on their iPhone. I’ve never gotten a dropped call on my iPhone. Also the network here in Sacramento CA seems to be getting better. I have 5 bars most of the time now when just a year ago I was geting 2-3 in some areas of town.
As I said I before; the only reason iPhone costs $200 today is because AT&T can afford to provide double the subsidy for virtually ALL other phones on ALL other carriers. This is because every single iPhone in the US will remain on AT&T long after the initial two-year contract expires (I’m dismissing the negligible number of unlocked devices, of course). The nominal period for recovery of a standard $200 subsidy is about 18-20 months. Most carriers will allow you to pick a new subsidised phone after that (and extend your contract for two more years). AT&T has to recover $450 from the iPhone users.
With no exclusivity, neither carrier can afford to risk $450 subsidy, if the user can switch to another carrier before the subsidy is recovered (i.e. after that two-year contract). If the subsidy goes down, retail price goes up.
As 84 Mac Guy said, you simply can’t expect those $7B in revenue with a retail price of $350.