Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Apple Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Eric L who wrote (69140)	9/24/2007 5:34:38 PM
From: Guth	Respond to of 213177

You and me both. Back in July a big deal was made about the $150 bounty AT&T paid Apple for each iphone sold. I hadn't heard a peep about it from the wonks since. I was really surprised nobody brought it up with the rampant gloom and doom about falling margins after the price reduction announcement. This is the only guy that I've seen mention it since July: But the economics of the iPhone are somewhat murky because of the fees that Apple charges AT&T. Apple gets a one-time "bounty" on each device sold..... thestreet.com I would like to see Munster ruin another family vacation and get to the bottom of what the margins really are for the iphone.

To: Eric L who wrote (69140)	9/24/2007 5:49:05 PM
From: slacker711	Respond to of 213177

We don't REALLY know what Apple's net wholesale price after credits and debits to AT&T and other carriers (which may be lower than MRP) is, do we (or did I miss something authoratative in this regard)? The only concrete piece of information that we have about sales of the iPhone through AT&T stores is that they generate a small profit on the sale of each phone through their retail stores. In addition, AT&T made comments prior to the launch of the iPhone about the fact that they have virtually no risk with the iPhone....which leads me to believe that T isnt carrying the iPhone's in their stores on their balance sheet, and might be generation the profits through a commission. If that is true, all of the sales to end customers are really from Apple....and thus, no "wholesale" price from which to calculate royalties. Beyond that, Apple has confirmed monthly payments of some kind, but I dont think anybody has said whether it is a fixed payment or the widely rumored percentage of revenues. I believe a couple of analysts have also reported that AT&T is paying a fee to Apple for the customers that use iTunes for activation, but this hasnt been even remotely confirmed. As usual with Apple....way more questions than answers. Slacker