AT&T iPhone Subsidy $325
The AT&T subsidy for the new Apple iPhone 3G is $325, well over the typical smartphone subsidy of $200. With expected prices of $199/$299 for the 8GB and 16GB models, I would expect to see some cannibalization of sales from the iPod Touch line, as well. Why wouldn't you take the newer sister model with more features over a near twin with less features for roughly the same price? This may be a great way for both Apple and AT&T to increase revenues and move more people along to a smarthpone platform.
AT&T is taking the bigger gamble here because they expect the new iPhone to drive new subscribers to them, making up the initial loss on the long term contracts instead. I think that's a pretty smart move on their part. AT&T is also paying Apple an extra $100 for customers signed up in Apple Store, so expect to see things busier on that front. This dovetails well with the expectation that we won't see too many iPhone 3G models in the secondary markets like the first generation that could be activated at home (or sold on eBay!).
Head on over to Barrons for the original article and some discussion of stock implications.
Tags: apple iphone, iPhone 3G, ipod touchRelated posts
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