Apple CEO: Enough of This iPhone Subsidy Silly Talk

Apple CEO Tim Cook has some advice for investors concerned that subsidy cuts and/or stricter upgrade policies by U.S. wireless carriers could undermine iPhone sales. Don’t worry so much. Apple doesn’t.

Remarking on the subsidy issue during the company’s second-quarter earnings call Tuesday, Cook dismissed it, essentially saying the iPhone is so exceptionally profitable for carriers that they’re not likely to mess with it. “From the carriers’ perspective, it’s important to remember the subsidy is not large relative to the payments across a two year contract period,” Cook said. “Any delta between the iPhone and another phone is even smaller.” Beyond that, there are a number of advantages to carrying the iPhone. “A number of carriers have told me that churn from iPhone customers is lowest of any phone they sell,” Cook said. “That’s obviously a significant, direct financial benefit to the carrier.” But the iPhone’s greatest advantage is this: It’s a device that customers want to use every day.