Apple and AT&T iPhone Revenue Sharing Estimates

[iJon]

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.

I'll have to disagree with you. I used to have a SE 710A, best rated phone at it's time of release. Sure it got on the web, not like the iPhone though. Sure it could play music through it's shoddy playlist, but not like the iPhone. No pocket .

I could go on but you get the picture. Yes there are phones that do basic functions like the iPhone for cheaper and yes there are cheap phones that do some basic functions that the iPhone cannot yet do.

But to say there are phones out there that can browse the web, play music like the iPhone does and even be better is laughable in my opinion. Find me one phone that has created as much hype and had as much satisfaction as the iPhone.

jon

 

[matthewHUB]

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.

thanks. i wasn't joking

 

[fixyourthinking]

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.

I can only assume that the numbers are based on what AT&T employees get - they get 1.5% of the sale and 3% of the contract if the contract is $75 or more + 25% of any extra services (DATA/Insurance/Text) per month for the first year. Then it drops off the paycheck.

These rates may be lower for the iPhone - but know that there IS a split that AT&T employees are receiving for every phone sold with a plan.

I'll have to disagree with you. I used to have a SE 710A, best rated phone at it's time of release. Sure it got on the web, not like the iPhone though. Sure it could play music through it's shoddy playlist, but not like the iPhone. No pocket .

iJon I too had this phone. It was also awkward to slide it and had proprietary headphone adapter. The only advantage it had over the iPhone was the bluetooth data exchange and syncing.

 

[Irafas]

Hmm these numbers sound really low... In Australia mobile phone dealers typically get an upfront commission of some multiple of the monthly subscription (eg with $100 plan over 24 months they might get $1000 commission) plus a trailing commission of some single digit percentage of the monthly bill for a period of time.

Dealers use this to subsidise handsets (mostly give them away for free), and if Apple is acting like a mobile phone dealer (signing up new customers for long contracts) and NOT giving away a phone they'll just be pocketing everything (good work if you can get it)

As a former employee of a mobile phone company I'd say with near certainty that Apple will be getting a higher commission than AT&T employees, and it's probably higher than the numbers quoted.

 

[scu]

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.

Bingo

Lets do a little math. If Apple sells 45 million phones in 2009 and they get an average of $9 per month from each customer that would mean $405 million a month or $4.8 Billion a year for 2 years. That folks is $4.8 Billion of 100% pure profit. If Apple sells 45 million phones, aapl is very cheap even at $205 a share.

We are not even taking into account the huge Halo affect from the iPHone, the Apple TV revenue, and the Leopard release.

Now I should caution that Munster prediction is world wide of 45 million phones so only a part is related to the ATT deal. But I think Apple can sell 40 million phones in 2009 in the US alone.

Everyone I talk to would love to own an iPHone, the problem is the price. But give it time, they will come down. In the mean time Apple is making a killing on the profit margin of this baby selling for $600 bucks a pop.

 

[CalfCanuck]

ATT may share revenues but hey save on equipment costs

--

 

[CalfCanuck]

ATT may share revenues but they save on equipment costs

One thing that many here are forgetting is that ATT is saving money on equipment costs compared to their normal customers.

Ususally they have to give free phones to lock in 24 month contracts. Granted, this "free phone" subsidy may ony average to $100 a year or so, but that almost equals the revenue sharing with Apple.

Plus they probably make a small margin on each iPhone sold through ATT stores.

So the net "shared revenue" loss to ATT is not really as much as it appears compared to their other non-iPhone contract customers.

 

[inkswamp]

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

Did I somehow miss the phones prior to this that have a 3.5" multi-touch screen interface? And an amazingly intuitive UI running on OS X? And the ones that seamlessly sync with iTunes?

That may sound like I'm splitting hairs, but you did say "everything" and I beg to differ.

I ask you to name a single phone that does all the things the iPhone does as well as the iPhone does them. I think one of the biggest problems with all these so-called phones that "do everything the iPhone does" is that they are a pain to deal with so it makes those features virtually useless. My cheapo freebie phone supplied to me by my employer does a lot of things the iPhone does too with a UI that is so convoluted that I have no desire to figure it out. Even trying to quickly add a note to myself involves at least a dozen buttons pushes to dig down to the right place and create a new note. It's not worth the effort, especially when I have to dig back down again to read it. Oh, and it does it with a dinky little screen that looks like garbage and with a tiny, cluttered little cluster of buttons on its face.

 

[kalamus]

Yeah except not.

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

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

Well if its that easy, show me just ONE of these so called better phones. Just one.

What Apple has done here is prove to everyone that a cell phone can be a great experience and be easy to use to boot. Look at all of the previous cell phones. They absolultely are a horror to use and they didnt have 1/10 the functionality of what the iPhone has brought the masses.

You really must give credit where it is due. My friend, you are delusional.

 

[Black Belt]

Where there is that much money coming in, there is going to be fierce competition. There is no hardware in the iPhone that didn't already exist and the software is...well...just software. This has upped the ante for what monetary abuse people will tolerate for a cell phone apparently (if they don't scream when you tax em, tax em harder!), so I would expect some amazing stuff to come from the big boys. In chess you let the pawns play first.