AT&T and Verizon shine as iPhone sales sink

A curious trend has developed in recent quarters: When iPhone sales fall, business improves for AT&T and Verizon. What gives?

Carriers pay heavy up-front subsidies to bring the cost of most smartphones down to $200 for their customers. Apple commands the highest subsidies for the iPhone. Since many potential iPhone customers are now in a holding pattern, waiting for the next iPhone to debut, iPhone sales have steadily declined since last fall. As iPhone sales slump, the amount of money AT&T and Verizon pay Apple up front has fallen, improving their margins. But telecom analysts think that trend is about to reverse course. With a highly anticipated 4G-LTE iPhone expected to launch in October, wireless margins will probably plummet in the fourth quarter.