jbelkin

Apple's AT&T Deal Is Costly

For a guy who claims to be a numbers guy, you don't do much calculating yourself.

Apple is selling an EXTRA 400,000 or 1+ million phones where other cell phone manufacturers might sell a few thousand more ... that's right - not on the network but still buying ...

This would be a problem if Apple was subsidizing each phone sale but it's NOT- every one at FULL PRICE 100% of the time.

As for people who can't/won't switch to AT&T ... how much does AT&T make for this customer? That's right - ZERO.

How much does Apple make? That's right $400 to $500 DOLLARS!

Versus ZERO.

It's ALL found money. Even better, Apple has to provider ZERO tech support - how much savings is that?

And with everyone that goes overseas that's not "legal," that just adds to the cachet of the product. How many products are considered FREE ADVERTISING & MARKETING for a company yet they made $450 TODAY?! Not to mention every Iphone sale is potential iTunes sales (even overseas ones either have stores or if they have a US credit card can buy tracks & movies) ...

By your math, since everyone on this planet doesn't have an iPhone, that's a trillion loss?

So you prefer possible future monthly revenue versus a $450 sale today? The future monthly stream is never guaranteed even if you sign up a carrier - people drop out, people don't pay ... but you don;'t factor that in because it's too hard?

The real world is more complex than just A+B-C ... or perhaps you should stick to analysing industries that aren't so complex.