AT&T Subsidizing iPhone 3G for $325?
Barrons reports on a recent analyst note from Oppenheimer which claims that AT&T is discounting the iPhone by $325 to reach its $199 (8GB) and $299 (16GB) prices. This means the actual unsubsidized iPhone cost would be $524 and $624, respectively.
The higher subsidy rate for the iPhone, he says, reflects AT&Ts faith in the iPhones ability to attract new subs and increase ARPU. And he also says it has positive implications for Apple, since it effectively results in a playing field that is tilted in their favor. Rivals must scramble to hit a lower, less profitable price point, he writes.
The analyst also reports that AT&T is paying Apple an additional $100 per phone for iPhones sold in Apple stores for a total commission of $425. No reasoning for this additional commission is given.
Based on this higher-than-standard subsidy, it is believed that Apple's revenue for the iPhone 3G is comparable to the original iPhone where Apple received a portion of the monthly subscriber fees. This agreement has been modified with the iPhone 3G with the substitution of an upfront subsidy rather than a monthly payment.
The large amount of the subsidy introduces some interesting issues for some AT&T customers who are trying to upgrade to the iPhone 3G. Little official information has come out of AT&T or Apple regarding rate plans or eligibility to qualify for the subsidized iPhone price. It seems clear that existing iPhone customers will be able to buy a fully subsidized iPhone 3G, but the answer for current non-iPhone AT&T customers remains murky. Known and rumored information for upgrade eligibility has been consolidated in this guide.
Popular Stories
Last year, Apple launched CarPlay Ultra, the long-awaited next-generation version of its CarPlay software system for vehicles. Nearly nine months later, CarPlay Ultra is still limited to Aston Martin's latest luxury vehicles, but that should change fairly soon.
In May 2025, Apple said many other vehicle brands planned to offer CarPlay Ultra, including Hyundai, Kia, and Genesis.
In his Powe...
Apple today confirmed to Reuters that it has acquired Q.ai, an Israeli startup that is working on artificial intelligence technology for audio.
Apple paid close to $2 billion for Q.ai, according to sources cited by the Financial Times. That would make this Apple's second-biggest acquisition ever, after it paid $3 billion for the popular headphone and audio brand Beats in 2014.
Q.ai has...
The calendar has turned to February, and a new report indicates that Apple's next product launch is "imminent," in the form of new MacBook Pro models.
"All signs point to an imminent launch of next-generation MacBook Pros that retain the current form factor but deliver faster chips," Bloomberg's Mark Gurman said on Sunday. "I'm told the new models — code-named J714 and J716 — are slated...
Apple recently updated its online store with a new ordering process for Macs, including the MacBook Air, MacBook Pro, iMac, Mac mini, Mac Studio, and Mac Pro.
There used to be a handful of standard configurations available for each Mac, but now you must configure a Mac entirely from scratch on a feature-by-feature basis. In other words, ordering a new Mac now works much like ordering an...
Apple is planning to launch new MacBook Pro models with M5 Pro and M5 Max chips alongside macOS 26.3, according to Bloomberg's Mark Gurman.
"Apple's faster MacBook Pros are planned for the macOS 26.3 release cycle," wrote Gurman, in his Power On newsletter today.
"I'm told the new models — code-named J714 and J716 — are slated for the macOS 26.3 software cycle, which runs from...
