AT&T Gives Apple $18 per iPhone Every Month


Piper Jaffrey's Gene Munster estimates that AT&T pays Apple an $18 share of every iPhone subscription each month, as c|net News reports. That's $432 for every iPhone over the duration of the 2-year contract - or more than the iPhone's retail cost.

Earlier, Munster had estimated Apple received a mere $3 per iPhone, but Apple's Q4 earnings statement recently got him rejigging the numbers.

This is significant revenue, when one factors in profit margins per-unit for the iPhone as well. But what it really suggests is how important it is for Apple to keep iPhones on AT&T, and out of the hands of unlockers (who, in effect, pay Apple a single flat fee).

It also signals that Apple is likely to remain serious about bricking iPhones that don't play by Cupertino's rules. But that won't apply in, say, France, where Apple is forced to sell a (higher-priced) unlocked iPhone.

The licensing revenue for iPhone is considerable (albeit spread over a considerable period), but given that iPod really generates revenue from hardware only (iTS makes some money, but it's really there as a huge iPod promotional too and to provide content for iPod), one wonders whether unlocked iPhones on more markets would make more sense. iPod builds revenue out of sheer volume; iPhone could do the same.

The question is whether iPhone will still be on AT&T in two years' time? Not if you're a betting person.