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AT&T pays Apple upto $11 per iPhone Customer, believe Piper Jaffray Analysts

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Saturday, July 21st, 2007 | Related entries: Gadgets, Ipod, Mobile Phones

Apple iPhone and AT&T Logo

Apple’s newly launched iPhone is surely the most talked about gadget ever and speculations, rumors and estimations about this revolutionary piece of technology have been nothing short of abundant.

The ‘lucky’ carrier of the iPhone is AT&T. But what is the real deal behind the iPhone-AT&T package is something that analysts and experts have bee wondering for some time now.

Gene Munster, a Piper Jaffray analyst shed some light on this matter. According to one of his reports, also quoted by AppleInsider.com, AT&T pays a fee to Apple for each iPhone sold.

“While we do not know the exact details of the agreement, we conservatively estimate that AT&T gives Apple $3 per month (over the life of the 24 month contract) for every iPhone customer already with AT&T and $11 per month for every new subscriber,”said Lead analyst Gene Munster.

Now you must be wondering what AT&T has to gain if it pays Apple on per iPhone sale basis? Well, Munster explained that an in-house survey of 253 iPhone users found that 52% are ditching their previous carrier in order to migrate to AT&T.

In fact, just a few days before the grand iPhone launch, AT&T revealed three affordable and attractive service plans for iPhone users with prices ranging from $60 to $100 per month.

In fact, AT&T’s service plans include use of the iPhone’s Internet and email service, Visual Voicemail, 200 SMS text messages, unlimited mobile-to-mobile and rollover minutes. So these additional offerings also make AT&T service plans even more attractive to iPhone users.

Thus, paying just $3 or $11 per customer who will obviously shell out $60 or more per month for two years sounds like good business for AT&T. As for Apple, this is just an additional source of revenue.

Munster however cautioned that Piper Jaffray is not aware of the specific details of any agreement between AT&T and Apple. He also states that his report is based on estimates. That’s his job after all!

According to media reports, Apple sold already close to 1 million unites of the iPhone. Munster has now estimated that Apple will sell 3.2 million iPhones in 2007, 12.4 million in 2008 and 45 million in 2009.

As for the rest of us, we’ll just have to wait and see what becomes of the iPhone.

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