Apple and AT&T iPhone Revenue Sharing Estimates

[MacRumors]

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Gene Munster estimates the AT&T/Apple iPhone revenue sharing at "$3 per month (over the life of the 24 month contract) for every iPhone customer already with AT&T and $11 per month for every new subscriber."

Apple has been rumored to get some form of monthly revenue sharing from AT&T for iPhone customers.

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[stagi]

$3 month can add up to some fat cash for apple if the iPhone takes off.

 

[KingofAwesome]

Where do these numbers come from? If I'm not mistaken, this is a new idea and we therefore don't have anything to base these numbers on.

But even a dollar a month per customer will be be great for Apple.

 

[matthewHUB]

nice that they get more for new subscribers

 

[Sun Baked]

nice that they get more for new subscribers

Look at all the money Howard Stern got for new subscribers ...

We had to expect some sort of payola to get the exclusive, if it is this high it'll make the next few 10-q filings interesting.

 

[kcroy]

Looking forward...

I am really looking forward to the actual numbers being released. Sounds good, but I too am curious where these numbers come from.

 

[dongmin]

$3 month can add up to some fat cash for apple if the iPhone takes off.

$11 a month for new customers = $264 over a 2-year contract

Now THAT is a real significant chunk. If you say Apple sells 20 mil iphones a year and 25% are "switchers." That's $1.32 billion in additional revenues. Cha-ching!

 

[arkitect]

20 mil iphones a year

I don't think even Steve Jobs has those kind of dreams…

 

[Yankees 4 Life]

11 dollars per new subscriber???!!! damn, apple just took att and forced 'em to bend over. Thats crazy cash. No wonder they are making the revenues accrue over two years instead of at purchase.

 

[mkrishnan]

I don't think even Steve Jobs has those kind of dreams…

There are projections out there of even more than this...

http://www.appleinsider.com/article..._should_top_45_million_by_2009_says_firm.html

It's not totally unreasonable, based on examples of, say, the RAZR in the cell phone world or the iPods outside the cellphone world. I think it pretty much requires though that Apple is as aggressive with iPhone product development as they are with the iPod. If they aren't willing to pump out small enhancements on a yearly + basis as well as a broader set of phones with different kinds of capabilities and price point, yeah, they'll never get into the tens of millions of units. But if they do both of those things, it seems very feasible.

 

[Peace]

11 dollars per new subscriber???!!! damn, apple just took att and forced 'em to bend over. Thats crazy cash. No wonder they are making the revenues accrue over two years instead of at purchase.

If AT&T is bending over it's only to pick up that extra 1.3 billion dollars they're getting from switchers.
($48X24 months) X 1 million new subscribers..

 

[Yankees 4 Life]

If AT&T is bending over it's only to pick up that extra 1.3 billion dollars they're getting from switchers.
($48X24 months) X 1 million new subscribers..

eh, i dont think 2 billion is even close to what ATT gets from this. they will prolly get round 5-8 bill, because there a ton of people, like myself, who are on family plans...

 

[oscuh]

Assuming 600,000 iPhones sold thus far, and assuming a certain percentage are new contracts vs. existing, you're looking at $125 million (conservatively) or more over the life of a 24 month contract for all those phones, not to mention the millions more phones they'll sell over the coming year.

Of course, that doesn't include the $400+ million is sales of just the iPhone unit itself so far. Costs $200 to produce, sell for $600? Oh yeah ...

As far as sales in the future, when 32% of people surveyed said they'd buy one, that's easily 50 MILLION people with an iPhone in their pocket .. and that doesn't even count overseas sales.

And who says Apple doesn't know what it's doing?

 

[dongmin]

Remember that the iPhone prices will come down, sooner or later. The real money will be made in the subscriptions/contracts. That's why Apple is so smart in setting this precedent and getting a share of the pie.

 

[MongoTheGeek]

Never mind the rumored 50% margin on the phone. Apple is pulling in money hand over fist.

 

[twoodcc]

dang, sounds good for apple

 

[JonHimself]

Look at all the money Howard Stern got for new subscribers ...

We had to expect some sort of payola to get the exclusive, if it is this high it'll make the next few 10-q filings interesting.

Wooo Howard Stern!

 

[Yankees 4 Life]

this is prolly the biggest coporate coup/raping since god knows how long...

 

[kalamus]

this is prolly the biggest coporate coup/raping since god knows how long...

Can't rape the willing. ATT knows exactly what they got into. You dont form a multi billion dollar company making stupid business decisions. Apple has just set the bar for other phone manufactorers out there. You can thank Apple later for the 500% quality increase in all cell phones from here on out. Quite simply ,Apple has changed the cell phone business forever in one fell swoop.

 

[matthewHUB]

Look at all the money Howard Stern got for new subscribers ...

We had to expect some sort of payola to get the exclusive, if it is this high it'll make the next few 10-q filings interesting.

who the hell is Howard Stern? forgive me... i'm british.

 

[mkrishnan]

who the hell is Howard Stern? forgive me... i'm british.

In case you're not joking, he was originally an American radio personality who got famous for doing "shock" morning shows -- pushing limits for sexual content, etc. He's been in a bunch of scandals, and now I think he's signed on to do digital satellite radio and television but is no longer on OTA radio. He's been implicated as a major driver for increases in satellite radio subscriptions (that's the relevant part).

This is his biography.

 

[slughead]

Can't rape the willing. ATT knows exactly what they got into. You dont form a multi billion dollar company making stupid business decisions. Apple has just set the bar for other phone manufactorers out there. You can thank Apple later for the 500% quality increase in all cell phones from here on out. Quite simply ,Apple has changed the cell phone business forever in one fell swoop.

Yeah except not.

There are phones that do everything the iphone does better, and they cost less.

They just don't look as good nor are they as compact.

ATT's service plan is also overpriced and slow.

Apple's done nothing here except simplify and expedite the way people buy and activate phones.

 

[creator2456]

True, but it doesn't matter...

Apple's done nothing here except simplify and expedite the way people buy and activate phones.

...the general public and average joe now know how good a phone can be.

You can say the same thing about the iPod and look how that has turned out...

 

[indigo144]

Its a simple twist on the existing business model

US Carriers had a business model where they routinely hand over $200+ to 3rd party vendors like Amazon for bringing in new subscribers.

In the old model the 3rd party vendors passed on most of that to the customer in the form of a phone subsidy.

In the new model, where the drooling customer is willing to fork up all the dough, and then the (already accounted for sum) is rightly passed on Apple as the source of the drool. The carrier's bean counters have already accounted for a similar practise.

All that changed is in who'se hands the dough ends up in.

 

[reallynotnick]

Well with about a 50% profit margin and this on top of it, I am surprised at how little storage the iPhone has. At the VERY least it should be 8GB/16GB if not 16GB/32GB.

Oh well, I can't buy an iPhone (no AT&T) and if this makes Apple richer I guess I am all for it.