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djeremy
join:2004-07-12
San Francisco, CA | Re: Why share I just don't understand why manufacturers lock themselves into these deals to begin with. If Apple sold the iPhone on all carriers, they'd probably have several million more customers.
I have an unlocked Android on T-Mobile right now, but I'd probably have an iPhone if it wasn't exclusively on America's worst network. | |
|  openbox9
join:2004-01-26
Alexandria, VA
kudos:2 | Re: Why share said by djeremy:If Apple sold the iPhone on all carriers, they'd probably have several million more customers. But significantly less earnings per device sold. | |
| | | | Re: Why share said by openbox9:But significantly less earnings per device sold. Less earnings from a carrier exclusive deal, sure, but Apple would stand to make more money from the iPhone App Store and iTunes with millions more iPhones sold. Easily making up that lost revenue from an exclusive contract with AT&T. | |
| | | openbox9
join:2004-01-26
Alexandria, VA
kudos:2 | Re: Why share Apple's cut on the apps in the store is 30%. I doubt that an extra few app sales on an influx of a million new iPhones is enough to counteract the drop in earnings kickbacks on handset sales. Apple makes a very handsome profit with thick margins, I'm sure they've done the math and determined that exclusivity is more financially viable from their perspective. | |
| | | | axus
join:2001-06-18
Washington, DC Reviews:
 ·Verizon Online DSL
| Re: Why share According to this article, AT&T may be paying Apple $18 per month per subscriber:
»news.cnet.com/8301-13579_3-9803657-37.html
That's a lot of recurring revenue, and probably why Apple has an interest in keeping this exclusivity agreement. I think they could satisfy the legal concerns IF they changed the exclusivity requirement to be optional. Like, "for every month that Apple is exclusive, AT&T will pay them $18/month/subscriber". Then either side can end the arrangement when they please, which could happen if another carrier waved some money in Apple's face.
Assume AT&T gives them $18/mo./sub. Also assume that they sell $10 of apps/month/subscriber, and get to keep $2 of that. To simplify, say its one subscriber, so they get $20 per month.
If they ended exclusivity and sold 200% more iPhones, they'd now have 3 subs. That's $6/mo from the App Store profit, pretty weak compare to $20/mo. They could make up for exclusivity loss by asking for $6/mo/sub kickback from any carrier who wants to sell iPhones, problem solved. Now they're making $24/month, with more market share. | |
| | | | | openbox9
join:2004-01-26
Alexandria, VA
kudos:2 | Re: Why share But if exclusivity goes away and "everyone" has the iPhone, do you seriously believe that Apple can command the kickback you're suggesting? I don't. Also, I believe your "$10 worth of apps/mth/subscriber" claim is extremely optimistic. During initial ownership that may very well be correct, but I'm hard-pressed to believe that sales rate is sustainable over the life of an iPhone subscriber. I still stand by my claim that Apple has done the math and is confident the exclusive sales arrangement is currently the best way to healthy profits. | |
| | | | | | axus
join:2001-06-18
Washington, DC Reviews:
·Verizon Online DSL
2 edits | Re: Why share Here's a recent article about their total monthly sales:
»moconews.net/article/419-admob-a···h-month/
Also:
»lsvp.wordpress.com/2009/05/13/ap···p-store/
Let's say that 15 million have iphones (hard to tell who replaced vs. new customer). High estimate of profit is $3 per user, but that's over many months. So, you're right, they are keeping less than $2 per month per user.
I don't think we should prevent them from being exclusive if that's in their best interest, I think we should prevent AT&T from contractually obligating them to. I do think they can charge a premium on what they sell iPhones for, above the rate AT&T is getting. How many people buy phones without a contract? Of course its easier to go with the guaranteed income stream than assuming. | |
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