updated 04:25 pm EDT, Tue July 24, 2007
iPhone revenue-split deal
Apple is receiving unprecedented amounts in a long-suspected revenue-sharing agreement with AT&T, according to the market publication TheStreet. Sources claimed to be close to the two companies suggest that AT&T is paying Apple between $150 and $200 per purchased iPhone, plus another $9 a month for the duration of the mandatory iPhone contract (normally two years). This is even higher than what was predicted by the research firm Piper Jaffray, which amounted to $3 a month for existing AT&T subscribers, and $8 for new customers.
Should the new report be accurate, it could produce a dramatic surge in the price of Apple stock, which is already expected to surpass the $200 amount in the near future -- possibly by the end of 2007. The deal should still benefit AT&T as well, since the company will receive at least $51 a month from each customer's service plan. The deal is "not at all that bad for AT&T," says Roger Entner of IAG Research.