AT&T will paying Apple a $325 subsidy on each new iPhone 3G sold in the US in addition to offering the electronics maker a hefty bounty for each subscriber addition it gains from sales of the handset at Apple retail stores.
Oppenheimer equity research analyst Yair Reiner told clients in a research report that the subsidy is more than 50 percent higher than most other smart phones, which are typically subsidized by about $200
AT&T (T) is paying a subsidy of $325 for the new Apple (AAPL) iPhone 3G, according to Oppenheimer analyst Yair Reiner. He notes that the typical smartphone gets a subsidy of about $200. The new phone will be sold at retail for $199 for 8 GB of memory, or $299 for 16 GB.
The higher subsidy rate for the iPhone, he says, “reflects AT&T’s faith in the iPhone’s ability to attract new subs and increase ARPU.” And he also says it has positive implications for Apple, since it effectively results in a playing field that is tilted in their favor. “Rivals must scramble to hit a lower, less profitable price point,” he writes.
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