Carriers disagree on whether subscribers will pay as much as...
Carriers disagree on whether subscribers will pay as much as $600 for an iPhone, BTIG analyst Walter Piecyk said in a research note, reporting on a meeting Wednesday between sell-side analysts and AT&T officials. Piecyk noted he downgraded Apple in…
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April because of cost concerns. “The growth of the iPhone has largely been driven by the subsidies of post-paid operators but the impact of those subsidies on the operators’ margins has resulted in push back in the form of stricter upgrade policies,” he said. “In addition, we believe the next and much larger leg of growth for Apple will come from pre-paid operators, who in large part offer no subsidies to customers. So, in the absence of a price cut or a cheaper ‘nano iPhone,’ the question remains.” Piecyk quoted AT&T Mobility CEO Ralph de la Vega, who said at the meeting, “We have done a lot of research on this and we have not seen our customers say to us, `We welcome paying $500-$600 for a phone.'” Other carriers disagree with AT&T, he said. “Leap Wireless believes the answer … is yes … and just committed to buy nearly $1 billion of iPhones over the next three years that it hopes to sell at a partially subsidized price of at least $400 for the iPhone 4 and $500 for the iPhone 4S. Sprint thinks so too and plans to offer full price iPhones through its low cost pre-paid Virgin brand."