

Iphone making worldwide loss (for carriers) - wr1472
http://www.guardian.co.uk/business/2009/sep/06/telecoms-iphone

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djehuty
The study mentioned seems to say "iPhone isn't making the profit you might
think" even though the thing is spun in the story as "iPhone making a loss for
carriers."

But bearing that exaggeration in mind, Strand Consult is three guys in
Denmark, and they're not going to make a name for themselves saying "iPhone is
great." What I wonder is, if it's not worth having, why O2 and Vodaphone and
others are so keen to extend their iPhone operation into other countries?

iPhone is the beginning of a trend that's very negative for mobile carriers -
heavy data use (for limited returns and big burden on networks) taking over
from heavy call and SMS use (which have enormous profit margins.) There's
nothing the carriers can do to prevent this, but it's not going to be good for
their mobile spectrum cash cow. So don't blame iPhone, it was too good to last
indefinitely anyway.

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pmjordan
Looking at the prices for unlocked iPhones, this doesn't come as a big
surprise. The 3GS is especially expensive, at around €800 for the 16GB model,
and over €900 for the 32GB one. That's a _lot_ for a phone, most consumers
won't consciously spend that much, just hidden in the monthly fees, which have
to be in a similar ballpark to other tariffs.

However, I suspect the "old" 8GB 3G model, which is around €500 these days,
has been generating a tidy profit for the operators since the release of the
3GS. I wouldn't be surprised if this pattern repeated every year: the new
model is the loss leader, the previous model, profitable after having come
down in price, feeds off the awareness of the high end one.

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ugh
… for the providers, not for Apple.

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quant18
You can try filling out their form there if you want to look at the actual
text of the free report, rather than what the headline-writers spun it as. (I
tried, but didn't get anything yet from them yet).
<http://www.strandconsult.dk/sw3871.asp>

There's also their own non-quantitative summary of the report:
<http://www.strandreports.com/sw3501.asp>

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ninguem2
Headline is misleading (in the original article too). What the article says is
that the phone operators are losing money on the iphone. The article says
nothing about Apple, which presumably is making a ton of money.

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pmorici
It doesn't even really say that the carriers are loosing money it just says
they aren't reaping huge profits from it as some people seemed to expect they
would.

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st3fan
I really don't get this. It is just a fr*kking phone. From a telco perspective
there should be no difference between selling a Nokia smartphone or an iPhone.
If there is then they are doing it wrong.

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drewcrawford
I'm not so sure. iPhone users have a distinctive "feel" that distinguishes
them from other smartphone users. This translates into different behavior,
different responses to stimulus.

For instance, they tend to be music lovers, more-so than, say, Nokia
purchasers. This translates into high-bandwidth usage, and iTunes sales
probably isn't shared with carriers. They're interested in accessories that
achieve sonic fidelity, something that carriers are notoriously bad at. So
they get legit in-ear stuff instead of buying carrier's bluetooth crap.

And Safari is--well-- _usable_ , in a way that many (but not all) mobile
browsers are not. The awesome layout engine and sweet UI mean that you are
likely to actually use it while waiting in line or whatever, where on many
other phones the usability cost is so high that you'd rather be bored for 120
seconds waiting to check out of the grocery lane. And of course, the aggregate
cost of millions of people waiting in checkout lines is a force to be reckoned
with.

This is coming from a guy who loves his iPhone, so feel free to cast my
unwavering praise in a negative light. But the thesis--that iPhone users have
distinct behavior that tends to oppose the aims of carriers--is a valid one.

