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Technology Stocks : Apple Inc.

AAPL 259.35

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3:59 PM EST

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To: pyslent who wrote (75714)	6/14/2008 8:08:45 AM
From: slacker711	of 213181

So if you are right about the mix of unlocked phones, they used to get ASP + $240/2 on average, and now they only get ASP. Are you assuming the 3G iPhone carries that much higher an ASP? Even if true, gross margin is taking a huge hit, with the expectation of course of much higher sales volumes. These are some rough numbers comparing the two phones. 8GB EDGE iPhone My belief has been that AT&T didnt pay Apple anything for the upfront sale of the iPhone. I think an AT&T exec even indicated that AT&T made a small profit on the sale of the iPhone in AT&T stores. So Apple's revenue consisted of the upfront sale price plus the monthly revenue share. Let's estimate the share at $17 a month (I think that was the high-end of analyst estimates). Locked Handsets $399+$17*24=$807 Unlocked Handsets $399 If I use the 50% split for locked versus unlocked handsets I get an average of $603.50. 3G iPhone The only clue that we have right now on the wholesale price of the iPhone is Vodafone Italy's prepay pricing. They are selling the 8GB version for $773. That includes a 20% VAT tax. So, the untaxed price would be $644. There might be a small amount of profit in this price since Vodafone can use it to pay commisions to their resellers, but it should be fairly close to the wholesale price. As other operators start to announce prepay pricing we should get a better idea if this number is truly representative. I will say this though, it really isnt far off the prepay price of high-end Windows Mobile or Symbian devices. I think some analysts have used a subsidy number like $200 for the 3G iPhone. JMO, but I think that is way low. Slacker

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