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Created Nov 10, 2012
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Apple early iPhone subsidy?
When I say subsidised what I mean is that money was flowing from the customer trough the
carrier ending up at 1 Infinite Loop.
My basis for this "conspiracy" stems from the following:
1. The price of the iPhone increased when it went world wide. Likely to make up for lost income from AT&T.
2. Think that the normal Apple MSRP margins are not reflected by the $499 / $599 price point it was originally sold on.
3. The infamous price drop of 2007 to $399 without any change in the contract terms from AT&T underpins your claim that there
was no subsidy of the device from AT&T towards customer end price.
4. The GAAP subscription accounting model also hints that Apple will get paid per user over time.
My gut feeling from all this is; until AT&T started to subsidise the iPhone (from 3Gs - summer 2008?) they
paid Apple part of what the customer paid them over time. That is a form of subsidy. And if Apple were to
sell the phone completely unlocked without any carrier it would have carried a higher price than the
original $499 / $599, later $399 price tag.
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