Carriers Are Pressuring Apple To Drop iPhone Prices

Carriers Are Pressuring Apple To Drop iPhone Prices

Walter Piecyk from BTIG Research downgraded Apple’s rating a couple of days ago and since then, analysts have been going crazy. Piecyk’s report pointed out the short term risks for Apple’s stocks.

One such risk would be the average selling price for the latest iPhone, which is $600. This is how much a carrier has to pay for an iPhone which is later subsidized to $400.

For carriers, this is a high price to pay in order to attract customers to their network, particularly with other competitive premium devices that come with more convenient price tags.

To make the matter even worse for the carriers, the customers upgrade after two years and then they also benefit from a significant subsidy.

Some carriers, like AT&T, even allow an early upgrade but for an additional price. Walter Piecyk suggests that Apple risks that the carriers will try to “stunt the pace of phone upgrades in 2012.”

This means that the top carriers could join forces and try to implement strict upgrade policies and also pressure Apple into changing its pricing strategy.

This would allow carriers to ease the burden of heavy iPhone subsidies.

source: iMore

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