- AT&T’s subsidy for the iPhone is $400, not $450 as Marshall states. Best Buy buys 16GB iPhones from Apple for $542, and sells it for $199 with a 24 month service contract. AT&T reimburses Best Buy $400. Therefore, Best Buy’s margin is $57/iPhone.
- That subsidy wouldn’t change if other carriers offered the iPhone as Marshal states. Tim Cook stated at a earnings call that it hadn’t in other countries where they went from exclusive to multiple carriers that the subsidies didn’t change.
- iPhone users represent about 14% of AT&T
November 24, 2009