Carrier Trade Is Still In Apple's Favor

Author 
Coverage Type 

Carriers may be mad as hell at Apple, but they're going to keep taking it.

Verizon finance chief Francis Shammo took a shot at the iPhone-maker last week, saying the telecom carrier wants to promote Microsoft's Windows Phone platform as a third mobile ecosystem alongside Apple's iOS and Google's Android. He also said Verizon would cut more costs to offset the burden of subsidies from selling smartphones. Apple sells a standard iPhone to carriers for around $600, but consumers pay only $200 when they sign a two-year contract. The difference is the carrier subsidy. One option for carriers is to push other devices in stores. An Android device from Samsung, say, or the new Nokia Lumia running Windows, is more profitable for them than selling an iPhone. But don't expect the carriers to hurt Apple's lucrative mobile-phone franchise any time soon. That is because consumers still want iPhones. The best way for carriers to reduce iPhone sales would be to make them noticeably pricier than rival devices. But Apple's device is so popular that the company has significant power to set the price at which carriers sell the phone.


Carrier Trade Is Still In Apple's Favor