heySkippy quote:
"They do make it up. 2 years of contract @ $35 a month for a data plan more than makes up for the $400 subsidy to Apple. "
Quote:
Originally Posted by ilovejedd
They're not making up for the deep subsidies simply via volume. They do that by locking you into a 2-year contract ($55/month minimum but usually $80 or higher more often than not) with hefty early termination fees. Granted, because of the deeper subsidies, it does mean they make less profit on iPhone customers than they do on, say, Android or WP7 users but make no mistake, they still do rake in a lot of profit. Verizon initially said no to the iPhone (mostly because of the lack of control). It would appear that Verizon has weighed the pros and cons and figured that the pros outweighed the cons or they wouldn't be carrying the iPhone now.
It would be interesting to see whether Apple can maintain its dominance with Jobs gone.
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Hey guys and gals. Read the article. Verizon
lost money.
And one thing I am still not sure about is how that the customers upgrading also costs them money.
Explain that someone! If a customer enters into a 2 year contract and gets a subsidy for the first iPhone, and then 6 months or a year down the road, decides to upgrade the iPhone which would bump them into another 2 year contract, do they then get another subsidy?
I could see that really playing hell with the bottom line. And those iPhone users upgrade every time the color changes, or they add a suffix to the number.