Originally published: July 24, 2012
Last updated: July 24, 2012 - 9:57pm
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.
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