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Originally Posted by SeaKing
Anyway, I think the carriers are using that old plan of "trying to make up for losses on each unit, with volume." Even I have learned that doesn't work.
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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.