I was told the stores don't make any money selling iPhones.
'A government big enough to give you everything you want,
is strong enough to take everything you have.'
The price of a smartphone is $650. That's not gonna persist.
Dennis Woodside, CEO of Motorolahttp://www.androidauthority.com/moto...rategy-220042/Rolfe Winkler of the Wall Street Journal also thinks that these fighting words from Woodside should have “executives at Samsung shaking in their boots.” He also thinks that “folks at Apple should also be sweating.”
Or maybe because they want you to get a LTE phone so the 3G/4G network has less stress on it in larger markets?
They get $99 or so for the sale, and then pays Apple over $500. Where in any stretch of your imagination do you see AT&T making money on the sale? Where they hope to recover the subsidy cost is through the monthly service.
However, phones from Samsung cost AT&T less than the iPhone, and they get the same $99 from the customer, thus costing AT&T less in subsidy than an iPhone. Which is devastating AT&T's profits right now.
CNN Money had a nice article on how AT&T is losing money on every iPhone they sell.
... the subsidies on the iPhone -- roughly $450 per device -- are the highest in the industry. AT&T's subsidies are even more exacerbated because it gives away the iPhone 3GS for free.
Last edited by spdickey; 08-01-2012 at 03:17 PM.
The iPhone is prob the worst profit wise
How come this story is not coming from "The Consumerist" and how do I report a violation of TOS
I'm not in retail so can't confirm/deny other than the fact I have never been in any store or spoke to any sales representative that tried to "push" Windows on anyone. There have been many reports to the opposite - They hide them in the back corner and never discuss them because they know they aren't popular with customers who want iPhones or Androids.
My opinions are my own and do not reflect the opinions of my employer AT&T.
The iPhone is like heroin. The carriers are hooked on it, they love the high (mad rush of new customers, excellent retention of existing customers, and overall long lines of customers with every new iPhone release), but it's really unhealthy for the bottom line. Just like any addict they aren't exactly fond of their addiction and in fact may make genuine efforts to kick the habit (in this case carriers trying to steer customers to other phones) but they can't help themselves and like most addicts that enter rehab will probably fail (see the downward spiral T-Mobile has been in during the iPhone era).
So AT&T issued a statement that doesn't particularly deny the initial report from BGR.
So lets deobfuscate this a bit.The idea that we would steer any customer away from a particular device couldn’t be more farfetched. Our reps do what it takes to align customer needs with the best device for them. iPhone remains one of our most popular devices, which doesn’t happen by steering people away from it. Our reps are encouraged to try all devices so they are more knowledgeable on our industry-leading smartphone lineup.
"Our reps do what it takes to align customers needs with the best device for them." We attempt to talk them out of the phone they came in for if another phone is better for them (and us). And we'll do anything to obtain the that goal.
"iPhone remains one of our most popular devices." And darn it if Apple doesn't know that too, and charges us an arm and a leg for it. No matter what we do, it still sells like hotcakes.
"Our reps are encouraged to try all devices." To make sure they don't just hand over an iPhone when asked for one.
Bottom line, AT&T is trying to sell its other smartphones to reduce its dependence on iPhone sales. And apparently these efforts are working in AT&T's favor.
Staffers have, according to these same sources, been instructed to make an effort to show Android and Windows Phone devices to customers even if they came in specifically to pick up the iPhone or iPhone 4S. This set of tips says that this was so that customers could “make an informed decision.” This action appears to have had a large effect in some areas, with one source noting that sales of the iPhone had fallen from 80% of the store’s sales down to 60% – a dramatic change indeed.
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Android manufacturers have to compete on price. Apple can charge whatever they want. Here's the issue: if iPhone subsidies increase costs for the carriers, they raise upgrade fees and prices on everyone.
I didn't follow Cingular/AT&T before the iPhone launched, so I'm not sure what they took away, but Verizon got rid of early upgrade and the new every two discount right before the iPhone came out... and then added an upgrade fee.
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Honestly, this doesn't surprise me. They're trying all they can for people to stop buying 3G phones and go to 4G LTE phones. This isn't something just AT&T is doing.
I was with my friend a couple months ago and he's on VZW. The lady would not stop pushing the RAZR because it had LTE, whereas the iPhone 4S was stuck on CDMA. It got pretty annoying.
That being said, once iPhone 5 is out, these networks are gonna get wrecked for us Android folk.
Phone History: Galaxy S4, HTC One, XPERIA Z, Galaxy Note 2 (x3), Nexus 4, Optimus G, Lumia 920, iPhone 5, Galaxy SIII (x2), One X, Galaxy Nexus, Lumia 900, Galaxy SII Skyrocket, Galaxy SII, HTC Inspire, Nokia N8, Atrix 4G, iPhone 4, N97, iPhone 3G, 5800, E71, N75, N95, HTC 8125, iPhone 2G, Blackberry Curve, RAZR V3, Motorola V551
Some may agree and others may disagree, but I think all the carriers should line up and raise the subsidized cost of the cheapest iPhone to $299.
Not only will this help the carriers margins, but it would help sway users to other products as well. However, they haven't. Instead, they have been collecting more money in other ways:
One of the biggest concerns with this is backlash from the customers, which is why I said the carriers should simultaneously increase the on-contract price. The carriers will save money and the customers will have no choice but to pay the price, or choose another product.So carriers have been gradually hiking prices. Over the past year, Sprint increased its smartphone rates by $10 a month, Verizon ended its unlimited data offering and New Every Two deal, and AT&T ended its unlimited plan and raised its prices by $5 a month.
Of course, while it isn't confirmed, the contract Apple has with each carrier likely forbids such action, but that is one way the carriers could neutralize the playing field.
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Oooh! AT&T is turning its back on the gold egg laying goose it has depended on for so long.