“The iPhone revolutionized the smartphone industry and made Apple the world’s most valuable company. But it hasn’t been all good news for the mobile carriers,” Miriam Gottfried reports for The Wall Street Journal.
“Now that three of the top four carriers stock the iPhone, it looks more of a burden than a differentiator. With Apple charging about $620 for each iPhone, according to UBS, carriers have to offer a subsidy of about $420 in order to sell customers the device for just $200,” Gottfried reports. “That is significantly higher than the roughly $300 carriers pay to subsidize some high-end Android phones.”
MacDailyNews Take: That would be because “high-end Android phones” are mere shadows of the phone they really want to be.
Gottfried reports, “If carriers could lower that cost, they would see a big benefit.”
MacDailyNews Take: Gee, no, ya think? This is some crack reporting by Miriam so far.
Gottfried reports, “The carriers are fighting back.”
MacDailyNews Take: Ooh, here we go, the carriers are “fighting back at Apple,” just like the WSJ’s headline promises…
Gottfried reports, “AT&T’s first move was to change its upgrade policy. In March 2011, it lengthened the amount of time before a customer was eligible for an upgrade to 20 months from 12 to 18 months, depending on the plan. Verizon already had a 20-month policy in place. But AT&T allowed all customers already due for an upgrade in 2011 to do so. The reality of the burden hit home in the fourth quarter of 2011 when all three major carriers reported weaker wireless-service margins. The reason: a flood of customers upgrading to the iPhone 4S. Carriers responded by raising upgrade fees. In February, AT&T doubled its upgrade fee to $36. Verizon Wireless instituted a $30 upgrade fee in April. It also did away with subsidies completely for customers who want to keep unlimited data plans. Sprint Nextel already had changed its upgrade policy to 20 months and doubled its upgrade fee to $36 before it started selling the iPhone last October. The discipline seems to be paying off: Verizon and AT&T both reported record wireless-service margins of 49% and 45%, respectively, in the second quarter. Sprint’s operating margin hit 17.9% from 15.2% the previous quarter. And for all three carriers, customer churn dropped. Without the upgrade policy change, AT&T’s overall earnings would have fallen in 2012 instead of the 9% they are expected to rise, says research firm BTIG.”
MacDailyNews Take: Here’s the condensed version: U.S. carriers with iPhone deals raised upgrade fees except in 2011 where AT&T grandfathered in current subscribers. All U.S carriers with Apple deals benefitted and continue to benefit greatly from iPhone. So, that’s it. That’s “fighting back at Apple,” according to the WSJ. What a bunch of dog-days-of-summer claptrap.
Full article – a silly waste of time under a misleading and sensational headline – here.
MacDailyNews Take: If any carrier doesn’t like Apple’s terms, they should feel free to drop the iPhone and focus on catering to cheapskate and/or ignorant customers with fake iPhones (while they last; court actions pending). Then they, too, can be just like T-Mobile USA. 😉
Carriers without iPhones are, just like the phones they offer, inferior.
[Thanks to MacDailyNews Reader “Edward Weber” for the heads up.]