Tuesday, July 24, 2007

Valleywag: TheStreet.com is reporting that AT&T is paying unusually large fees to Apple

"TheStreet.com is reporting that AT&T is paying unusually large fees to Apple in exchange for the right to sell the iPhone. The totals? $150 to $200 per phone, plus a $9 per user per month cut of the service fees. The upfront commission, which you can also think of as a discount on the true cost of the phone, is common in the industry and widely predicted; sharing service-fee revenue is something new. For Apple, which already plans to account for its iPhone hardware revenues evenly over the 24 months after a sale, this means that iPhone sales will juice revenues even more than expected. And for AT&T? It's getting a lot of high-tech, early adopter customers who wouldn't have gone to the carrier otherwise, but at the cost of setting a revenue-sharing precedent that will ruffle feathers in the wireless industry. Steve Jobs strikes a hard bargain. "

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