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[MSN] Phone companies lose $400 for each iPhone sold

post #1 of 89
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Quote:
It's proving to be a lousy business model for phone companies, and is raising red flags on Wall Street. "Can Apple continue to roll through industry after industry, soak up all the profits, and leave everything it touches as a smoking wreckage?" one analyst asked in the Los Angeles Times. "They've done it with music and handsets, and now they're doing it to the carriers."

Source

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post #2 of 89
...and then they recoup those costs with deliciously overpriced cellular plans.

Gotta love their math. They act like they're simply giving you a $600 phone for $200 and then let you walk out the door.
    
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post #3 of 89
Quote:
Originally Posted by coachmark2 View Post

Quote:
It's proving to be a lousy business model for phone companies, and is raising red flags on Wall Street. "Can Apple continue to roll through industry after industry, soak up all the profits, and leave everything it touches as a smoking wreckage?" one analyst asked in the Los Angeles Times. "They've done it with music and handsets, and now they're doing it to the carriers."
Source
thinking.gif

To be fair though, the carriers make up for it in locking people down with contracts and expensive data plans.

In Canada for example, the 6GB data plan costs $30 a month, on a 3 year contract, that's an extra $1080 from data alone. The average "smart phone" plan is $60 - $70 a month.

I would've thought that carriers got the iPhone's cheaper though, and had a wholesale agreement? Considering they only cost $200 to produce, and carriers are buying them in the millions, I find it hard to believe that they are paying $600 per phone, and if they are, well, no wonder Apple is laughing all the way to the bank.
Edited by 2010rig - 2/20/12 at 11:18am
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post #4 of 89

Oh boy, here we go.

 

Maybe they could do away with contracts altogether, sell their phones full price, and offer dirt-cheap month-to-month service instead. Problem solved.

 

Just kidding, that would be too sensible.

post #5 of 89
^Those.

Seriously, retail price may be $800 or whatever, but wholesale is a lot cheaper especially when you buy in the millions. Then they charge you $200, as well as locking you down for 2 years, then charging you up the butt for cell bill and even more for a data plan which cost them next to nothing. And lord knows if you want to terminate your contract then that more than picks up for the cost of the phone.


This is one reason why I like my Boost phone. Sure we pay full price upfront, but no contract and unlimited everything plan for $40 (starts at 50 and decreases every 6 months) is the way to go. Although getting texts and web browsing can be a little slow on Boost, it's still nice. Even if I have to wait an extra 5 seconds to get my text, hope I don't die of waiting.
post #6 of 89
$30 a month for a 2 year data contract is $720, so you're paying $920 for a $600 Phone. They're not losing money, though it's hard to pay for all those 3G cell towers Siri needs for $320.

But considering how alot of Android phones with similar specs go for $400 or less unlocked, $600 is pretty outrageous. Again, that shiny Apple logo is worth at least $200.
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post #7 of 89
Quote:
Originally Posted by Malcolm View Post

Oh boy, here we go.

Maybe they could do away with contracts altogether, sell their phones full price, and offer dirt-cheap month-to-month service instead. Problem solved.

Just kidding, that would be too sensible.

actually it would have to be full price PLUS some so they make money.
say 200 bucks per phone.
so your 200 dollar iphone is now 800 bucks. Since you want dirt cheap service.
    
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post #8 of 89
Quote:
Originally Posted by Sohryu76 View Post


actually it would have to be full price PLUS some so they make money.
say 200 bucks per phone.
so your 200 dollar iphone is now 800 bucks. Since you want dirt cheap service.


Which is how it already is in every other country ever. No prob.

 

post #9 of 89
Quote:
Originally Posted by Sohryu76 View Post

actually it would have to be full price PLUS some so they make money.
say 200 bucks per phone.
so your 200 dollar iphone is now 800 bucks. Since you want dirt cheap service.

2 Words.

Wholesale
Retail

They're already buying them cheap than the general public at wholesale prices. Then sells them for retail prices.
post #10 of 89
Quote:
Originally Posted by brucethemoose View Post

$30 a month for a 2 year data contract is $720, so you're paying $920 for a $600 Phone. They're not losing money, though it's hard to pay for all those 3G cell towers Siri needs for $320.
But considering how alot of Android phones with similar specs go for $400 or less unlocked, $600 is pretty outrageous. Again, that shiny Apple logo is worth at least $200.

Lol, nobody pays $30 a month for post-paid wireless service. My sprint bill is $180.
    
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