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Technology Stocks : Apple Inc.

AAPL 270.98

-0.3%

Jan 2 3:59 PM EST

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From: Dan Fleuris	6/13/2008 2:57:59 PM
	Read Replies (2) of 213177

Maybe I'm missing something, but what difference does it make if Apple gets an up front subsidy or an ongoing portion of the revenues? It would seem to me that it only affects when they get the money and how the accounting recognizes it. At the end of the day, it should be a simple comparison taking into account projected phone lifetimes, the cost of capital etc. The party to whom the issue is critical is AT&T and the main issue for them is how effectively the marketing strategy ties the phone to the carrier. After all, not many people are going to pay double carrier fees (AT&T's mandated service + whomever they switch to after unlocking.) If Apple gets the same cash (when costed out) in the form of a subsidy that they would normally have expected to get through revenue sharing, it should work to their advantage that fewer phones will be unlocked and their cash/shared revenue thus lost, unless consumers are so unwilling to go with AT&T (or the preferred carrier in their country) that they don't purchase at all. Or am I just restating the obvious? Dan

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