Friday, September 14, 2012

Apple IPhone 5 Will Cost U.S. carriers $10 Billion in Device Subsidies

Stifel Nicolaus analyst Christopher King estimates that U.S. mobile service providers will wind up incurring about $10 billion in device subsidies as they sell iPhone 5 devices.

If so, those sales would likely affect operating margins for both companies during the entire second half of 2012.

“Given our assumption of approximately $425 in carrier subsidies per handset, we believe the U.S. carrier market could be on the hook for more than $10 billion over the last three and a half months of the year alone, entirely due to the new iPhone launch,” he said.

If you wonder why service providers have a "love-hate" relationship with the iPhone, that's why.

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