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Wednesday, August 19, 2009

iPhone Does Not Make Phone Carriers Any Real Money

Apple does well on iPhone sales, carriers don't

The iPhone is one of the most popular smartphones on the market today and the device that most new smartphones look to fight in the market. It seems that almost every new smartphone that hits the market is hailed as an iPhone killer but so far, only the Palm Pre has come close.

InformationWeek reports that the iPhone is a loss leader for every carrier who sells it worldwide. According to new figures from Danish research firm Strand Consult, it was unable to find any carrier who increased profits with the iPhone.

Strand consult wrote in a report, "According to the research we have conducted on the operators, not one of these has increased their market share, revenue, or their earnings as a result of introducing the iPhone. When looking at the numbers we can't see the iPhone effect -- a lot of competitors are actually doing better."

AT&T, the exclusive iPhone provider in America, is a perfect example of what Strand Consult is claiming. According to the research firm, AT&T has spent $720 million in the last quarter to subsidize the iPhone on its network. Over the same quarter, AT&T added 1.4 million wireless subscribers, about two-thirds of which opted for the iPhone.

Providers like AT&T aren’t making huge sums of money on the iPhone, what they are hoping is that the device lures customers away from other carriers and they can make money off lucrative data plans in the future.

[via Daily Tech]

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