updated 03:20 pm EDT, Tue July 1, 2008
Piper on AT&T iPhone costs
Earlier estimates for the ASP (average selling price) of the iPhone 3G were too low, write analysts with Piper Jaffray. Following the announcement of AT&T's new iPhone plans, under which people can buy unsubsidized iPhones for $599 and $699, Piper admits that its earlier prediction of a $425 ASP was likely wrong. This is despite the fact that AT&T is believed to be drastically marking up the iPhone, in theory exaggerating Apple's revenue potential.
Using the older ASP, AT&T would have been charging a 50 percent markup on the contract-free device. Piper now believes that the markup is substantially lower, and Apple may be taking home an ASP of as much as $500. If this is true, it could add 8 percent to predicted CY09 revenue, working on an assumption of 45 million in unit shipments.
Piper further notes that if AT&T's markup is approximately 30 percent, it would still be higher than that Apple's typical number, which hovers around 10 percent for Macs and iPods.