AT&T pays Apple $325 subsidy for each iPhone 3G

If you’re wondering how much AT&T is paying Apple for every iPhone that it will sell in the US, research analyst Yair Reiner’s report might answer that question. According to Reiner, for every iPhone 3G sold in the US, AT&T is actually paying Apple $325 in subsidy.

The amount is higher than the normal subsidy that AT&T pays for other smarthphones it offers to consumers, which is usually only around $200. Likewise, said amount also speaks of how much confidence AT&T has on iPhone’s ability to propel its subscriber base. This will bring an increase in AT&T’s revenue through higher returns on new service and data plan subscriptions that will be brought about by subcribers wanting to have their iPhone 3G units.

In addition, Reiner also believes the subsidy might force rivals to lower the prices of their handsets to be competitive with the iPhone 3G.

Reiner ended his report with an additional note saying that he believes AT&T is still paying Apple an extra $100 for every AT&T subscriber who will sign up through various Apple stores. This, in effect, totals Apple’s commission from AT&T to a whooping $425.

Hence, Apple is actually not on the loosing end when the iPhone 3G hit stores on July 11, despite its low price tag. Interestingly, Apple will still earn the same amount of revenue it got from the original iPhone.

You have to give it to Apple for coming up with such a highly demanded product that it can afford to have mobile carriers pay them such a large subsidy just to distribute the iPhone 3G. To us, it’s a clever business strategy, and a profitable one at that.

Via [Apple Insider]