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Details of Apple - AT&T Deal Revealed

Tuesday, July 24th, 2007 at 1:20 PM - by

Previously, the financial arrangements between AT&T and Apple have been kept under wraps. Recently, however, some of the details have been revealed and the money flow to Apple is very good indeed, according to The Street on Monday.

"People close to the companies tell TheStreet.com that AT&T is paying Apple a bounty of between US$150 and $200 per phone -- plus $9 a month per phone over the life of the typical two-year customer contract," Scott Moritz reported.

The upshot is that there could be unexpected windfall for Apple. "This is unheard of," said one money manager who is long Apple. "No one has this plugged this into their models." Roger Entner from IAG research agreed: "It's a pretty sweet deal for Apple, and not all that bad for AT&T."

Scott Moritz concluded, "Wall Street knew Apple was getting a good deal, but it didn't know just how good it was."

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Tiger said:

member since 17 Jun 2003 with 1018 posts, unranked, send him a message or view his profile

Tue Jul 24, 2007 2:33 pm

So, if the deal works for both companies, it just proves Verizon really blew it.

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A guest said: (hide)

Tue Jul 24, 2007 5:14 pm

I know it's just marketing speak, but for all other phones, "bounty" == "subsidy", and it happens to include payments over the term of the mandatory contract. Now, how many other cell-phone manufacturers will leap onto this 'full-retail-price' lie...

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gslusher said:

member since 13 Nov 2002 with 2088 posts, unranked, send him a message or view his profile

Tue Jul 24, 2007 8:17 pm

Guest wrote:
I know it's just marketing speak, but for all other phones, "bounty" == "subsidy", and it happens to include payments over the term of the mandatory contract. Now, how many other cell-phone manufacturers will leap onto this 'full-retail-price' lie...

Does anyone know if the bounty is for ALL iPhones sold or only for customers switching from another carrier?

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elehcdn said:

member since 16 May 2005 with 9 posts, unranked, send him a message or view his profile

Wed Jul 25, 2007 1:46 am

I wonder exactly how many people became switchers just to get an iPhone. The real windfall for AT&T is the addition of new customers from other carriers.

As far as Verizon, I am not sure that Apple was all that interested. While Verizon may be the largest cell company in the US and are running the faster EV-DO network for data, from a worldwide standpoint GSM is the only way to go.

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