Does Apple set subsidized selling price or do carriers set it?

[aneftp]

I have always wonder this.

In the USA carriers seem to price all iPhone newest version starting at $199 on contract.

But I have seen European plans in the past that have offered the latest iPhone for free on contract with certain monthly plans.

 

[wickerman1893]

The carriers do. AT&T, Sprint, and Verizon pay the 'unlocked' price for an iPhone then sell it for their own subsidized price. But I'm sure Apple has quite a large say in the subsidized pricing.

 

[aneftp]

The reason I ask is there has been so much talk about carrier subsidies recently.

What's really missing from this talk in the USA is the fact that the explosive growth of family plans in the USA (simply because it makes most sense to be in a contract with a family plan due to the cost savings).

So right now 60% of all USA customers are in family plans. Just 6 years ago only 35% were in family plans.

So the best paying customers. The single line individual customers. Those are the most profitable paying close to $100 per month. Well. Carriers dirty secret is while they are adding more subscribers. Its really the family growth which general usually half the profit as the individual line but all lines get the same subsidy.

So to make it more attractive to stop prepaid customers from going to straight talk. Carriers can still charge same $90-100/month but entice individual plan customers with a "free iPhone 4S" on contract. At the same time make the etf $600 so those same individual customers don't try to game the system.

So apple doesn't allow them to do this? Or carriers don't want to change their $199 model?

Seems like a no brainer to try to get those higher paying individual customers back. The growth of family plans is really what's killing profit margins with the carriers in the USA.