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(CNN)   "Apple's iconic smartphone has almost single-handedly devastated profit margins for Verizon and AT&T"   (money.cnn.com) divider line 83
    More: Interesting, iPhones, Verizon, EBITDA, Nomura Securities, profit margins, iPhone 4Ses, CEO Dan Hesse, nightmares  
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4990 clicks; posted to Business » on 08 Feb 2012 at 10:45 AM   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-02-08 04:01:32 PM
one of Ripley's Bad Guys: This Looks Fun: TheGreatGazoo: prepaid Android phone for $110 and pay $35/month for a plan that includes voice, data, and texting with no contract.

Would you be willing to provide more details on this $35/month plan and where I could get it?

T-mobile (new window). $50 dollars but still unlimited.

and I bought a factory unlocked 3GS with all latest software direct from Apple for $345 plus tax. The ones on Craigslist still have ATT software on them affecting upgrades and reception.


I pay $45month with metro, no contract, unlimited everything. The only trade off is service in rural areas.
 
2012-02-08 04:33:15 PM
the opposite of charity is justice: Between 2009 and 2010, Verizon averaged EBITDA service margin of 46.4% per quarter. In the first quarter that the iPhone went on sale, that fell to 43.7%. Last quarter, when Verizon sold a record 4.2 million iPhones, its margin plunged to 42.2%.

I'm no economist, but is a profit margin drop from 46% to 42% accurately described as a "plunge"?


Finance/Economics writers often get carried away with descriptors in their writing. i think they just get bored of writing about it and put in hyperbolic statements in order to entertain themselves, regardless of how accurate they might be when describing magnitudes.
 
2012-02-08 05:38:09 PM
So a voice-only plan may be, say, $40 a month and add data for $30 more? 46% of $40 = $18.40. 42% of $70 is $29.40. And someone is whining about their margin?
 
2012-02-08 06:09:02 PM
I have Motorola Droid. Pay about 65 per month for unlimited data. 4G. Love it. Does everything I want and then some. Never bored with it. I also have an iPhone 4 that the company provides. It is a paperweight.
 
2012-02-08 06:38:04 PM
Do you think Apple actually cares if this negatively affects the carriers? Here is a hint, THEY DON'T CARE.

Carry on Fandroids...
 
2012-02-08 07:01:14 PM
No. AT&T and Verizon giving away phones thinking they could fark people over with termination fees or high monthly fees or two year contracts and lying to customers about "unlimited" plans have narrowed their profit margins to near zero levels

Nobody made these carriers go with Apple. If you sleep with a whore and it hurts when you pee, the problem isn't with the peeing. It's with the sleeping with whores.
 
2012-02-08 07:02:14 PM
LindLTaylor: I have Motorola Droid. Pay about 65 per month for unlimited data. 4G. Love it. Does everything I want and then some. Never bored with it. I also have an iPhone 4 that the company provides. It is a paperweight.

The Motorola Droid doesn't support 4G.
 
2012-02-08 07:15:40 PM
kingflower: Do you think Apple smartphone manufacturers actually care if this negatively affects the carriers? Here is a hint, THEY DON'T CARE.

FTFY. Now 100% accurate.

As long as carriers keep subsidizing the cost of smartphones, people will keep buying them. Apple just makes tens of billions of dollars in profits quarterly, and does it on the backs of Chinese workers. At least Samsung assembles their phones in South Korea, where ostensibly, labor conditions are much better. And their phones are still cheaper than the current iPhone model, before and after carrier subsidies.

Carriers subsidize phones because they have to in order to make money on data plans. It's win-win for manufacturers and the carriers.
 
2012-02-08 07:24:52 PM
As someone that has dealt with 30-35% average margins for years, I'm not feeling a lot of sympathy for these guys.
 
2012-02-08 07:27:15 PM
Why Would I Read the Article: Not sure why anyone still buys an Iphone. It's no better than the 10th best smartphone out there. Its time has come and gone.

This should be good.

userserve-ak.last.fm
 
2012-02-08 07:36:20 PM
MrEricSir: Now as for "all that money" Apple makes from iTunes, it's not much either. The cost of running the service eats into the profits. The point of iTunes is to get you hooked into the Apple ecosphere of hardware products, not to make money on music.

When they make $13B in profits in a single three-month period, they could offer the music for free and barely see a blip.

Lock down iTunes to Apple products and I would bet they'd see a significant jump in profits. Imagine the advertising: "buy an iAnything, and get the entire iTunes library for free for the life of the product!"
 
2012-02-08 07:38:51 PM
1macgeek_fanclub: This should be good.

Oh for fuhcks sake.
 
2012-02-08 07:42:21 PM
choo: TheGreatGazoo: 300 minutes. 2.5 GB of data, and unlimited texts.

Got this plan at Virgin for $25/month using an Optimus V. The phone is sorta clunky but it gets the job done. Previously with AT&T I had a dumbphone 400 min and 300 texts for around $50 a month after taxes and fees.

Won't be leaving anytime soon.


Exact same setup here. Sure beats the hell out of paying $85/mo. for my (at the time) iPhone 3G.
 
2012-02-08 08:08:16 PM
So the carriers are biatching that they can't make more money because Apple charges them a premium for the phone that draws people to that particular data provider?

Cry me a farking river.
 
2012-02-08 08:34:31 PM
why, because Apple gets to keep the profits and AT&T doesn't?

I'm ok with this...
 
2012-02-08 08:50:29 PM
the opposite of charity is justice: Between 2009 and 2010, Verizon averaged EBITDA service margin of 46.4% per quarter. In the first quarter that the iPhone went on sale, that fell to 43.7%. Last quarter, when Verizon sold a record 4.2 million iPhones, its margin plunged to 42.2%.

I'm no economist, but is a profit margin drop from 46% to 42% accurately described as a "plunge"?


in the logical world? no. In the "you're either growing or you're dying" shareholder world, yes. nobody looks at it as +42% over costs. just -4%
 
2012-02-08 09:08:27 PM
daveinsurgent: I'm open to suggestions. My BB is starting to annoy.

Please look at a 7 series BB 9900. Spend 5-10 minutes with it. Be objective and don't listen to anecdotes.


This. I have the 9900 and love it. Well made, fast, nice touch screen, physical keyboard, good form factor. It's worth a look.
Apple products are great, but brother, it is the marketing and hype that sells them. Do you really need a gazzillion apps, or a few good ones that really do something useful?
 
2012-02-08 09:24:05 PM
kingoomieiii: azazyel: Why Would I Read the Article: Madbassist1: I'm open to suggestions. My BB is starting to annoy.

Samsung Nexus galaxy. You won't know how you ever lived without it.

And it's only $99 on Amazon. I bought one and they had great customer service too.

Wrong Nexus. The Galaxy Nexus has been out only a few months. Buying one no-contract will still run you upwards of $500.

I was GOING to get one, but research revealed that the car dock is a piece of shiat with no built-in audio OR power, and there are reports of it actually scratching the phone. Love my Razr, though.


I actually think you are WRONG (new window)

I hate threads like these because as guy who manages wireless for a very large corporation I see nothing but incorrect data being throw around like people don't know how to google technologies or phones to truly understand what the hell they are talking about.

BTW the RAZR is a POS, it's MotoBlur ruins the phone and once you go 4.0 you will never go back. I test out pretty much every phone Verizon puts out since they are one of our main providers for all our lines and nothing Motorolla has put out on there is worth a damn. Only 4G phone outside of the Galaxy Nexus that is worth a damn is the Charge, it has a gorgeous screen and can play MKV's with out missing a beat and output to HDMI really easily.
 
2012-02-08 09:51:59 PM
TheGhostofFarkPast: I actually think you are WRONG (new window)

I was talking about buying the phone, as in without a two-year, $70-a-month contract

TheGhostofFarkPast: BTW the RAZR is a POS

Oh shiat, all this time I thought I liked my phone, guess I was wrong
 
2012-02-08 10:14:41 PM
As an employee of one of the carriers mentioned in the article, I have two points to make:

1. Yes, the subsidies are hurting us, and the consumers. Even our compensation has seen decreases since the iPhone came around.

2. However, for those of you asking "Why get an iPhone?" or saying that there are dozens of better phones on the market, keep in mind that a phone's features do not outweigh it's reliability. I can honestly say that I troubleshoot or replace somewhere between 10 and 20 Android-based devices (or BB or Windows) for every iPhone that requires more than a simple restart (not a wipe). The damn thing is simply the most reliable piece of equipment on the market, in my opinion.
 
2012-02-08 10:31:59 PM
TheGhostofFarkPast: kingoomieiii: azazyel: Why Would I Read the Article: Madbassist1: I'm open to suggestions. My BB is starting to annoy.

Samsung Nexus galaxy. You won't know how you ever lived without it.

And it's only $99 on Amazon. I bought one and they had great customer service too.

Wrong Nexus. The Galaxy Nexus has been out only a few months. Buying one no-contract will still run you upwards of $500.

I was GOING to get one, but research revealed that the car dock is a piece of shiat with no built-in audio OR power, and there are reports of it actually scratching the phone. Love my Razr, though.

I actually think you are WRONG (new window)

I hate threads like these because as guy who manages wireless for a very large corporation I see nothing but incorrect data being throw around like people don't know how to google technologies or phones to truly understand what the hell they are talking about.

BTW the RAZR is a POS, it's MotoBlur ruins the phone and once you go 4.0 you will never go back. I test out pretty much every phone Verizon puts out since they are one of our main providers for all our lines and nothing Motorolla has put out on there is worth a damn. Only 4G phone outside of the Galaxy Nexus that is worth a damn is the Charge, it has a gorgeous screen and can play MKV's with out missing a beat and output to HDMI really easily.


You just disproved yourself. Out of contract it's $799.
 
2012-02-08 10:58:26 PM
kbotc: TheGhostofFarkPast: kingoomieiii: azazyel: Why Would I Read the Article: Madbassist1: I'm open to suggestions. My BB is starting to annoy.

Samsung Nexus galaxy. You won't know how you ever lived without it.

And it's only $99 on Amazon. I bought one and they had great customer service too.

Wrong Nexus. The Galaxy Nexus has been out only a few months. Buying one no-contract will still run you upwards of $500.

I was GOING to get one, but research revealed that the car dock is a piece of shiat with no built-in audio OR power, and there are reports of it actually scratching the phone. Love my Razr, though.

I actually think you are WRONG (new window)

I hate threads like these because as guy who manages wireless for a very large corporation I see nothing but incorrect data being throw around like people don't know how to google technologies or phones to truly understand what the hell they are talking about.

BTW the RAZR is a POS, it's MotoBlur ruins the phone and once you go 4.0 you will never go back. I test out pretty much every phone Verizon puts out since they are one of our main providers for all our lines and nothing Motorolla has put out on there is worth a damn. Only 4G phone outside of the Galaxy Nexus that is worth a damn is the Charge, it has a gorgeous screen and can play MKV's with out missing a beat and output to HDMI really easily.

You just disproved yourself. Out of contract it's $799.


I understand the out of contract price I am not debating that I am debating someone saying it was 99 and someone else saying it wasn't. It is with a two year contract.
 
2012-02-08 11:21:05 PM
TheGhostofFarkPast: kbotc: TheGhostofFarkPast: kingoomieiii: azazyel: Why Would I Read the Article: Madbassist1: I'm open to suggestions. My BB is starting to annoy.

Samsung Nexus galaxy. You won't know how you ever lived without it.

And it's only $99 on Amazon. I bought one and they had great customer service too.

Wrong Nexus. The Galaxy Nexus has been out only a few months. Buying one no-contract will still run you upwards of $500.

I was GOING to get one, but research revealed that the car dock is a piece of shiat with no built-in audio OR power, and there are reports of it actually scratching the phone. Love my Razr, though.

I actually think you are WRONG (new window)

I hate threads like these because as guy who manages wireless for a very large corporation I see nothing but incorrect data being throw around like people don't know how to google technologies or phones to truly understand what the hell they are talking about.

BTW the RAZR is a POS, it's MotoBlur ruins the phone and once you go 4.0 you will never go back. I test out pretty much every phone Verizon puts out since they are one of our main providers for all our lines and nothing Motorolla has put out on there is worth a damn. Only 4G phone outside of the Galaxy Nexus that is worth a damn is the Charge, it has a gorgeous screen and can play MKV's with out missing a beat and output to HDMI really easily.

You just disproved yourself. Out of contract it's $799.

I understand the out of contract price I am not debating that I am debating someone saying it was 99 and someone else saying it wasn't. It is with a two year contract.


Ah. I just must have misread what you said.
 
2012-02-09 04:17:14 AM
iConic


/coming soon
 
2012-02-09 08:04:26 AM
Pick: Geez, I thought the folks in China built those things for 35 cents an hour. Dang phone should be $29.95. Apple has close to $100B it doesn't know what to do with. How about dropping prices and giving everyone a break?

... or splitting the stock so that more people can share the profits?
 
2012-02-09 08:12:02 AM
Hey you know what? I bet these carrier companies would be behind a 'phone-neutral' law that would:

a) Require everyone to buy their own damn phone.
b) Require all carriers to carry any phone model brought to them by their customers (well, within their supported frequency ranges).

Damn, you can't even buy one from apple without an attached plan.

Less like a phone - more like a mortgage.
 
2012-02-09 09:37:20 AM
lolcifer:

2. However, for those of you asking "Why get an iPhone?" or saying that there are dozens of better phones on the market, keep in mind that a phone's features do not outweigh it's reliability. I can honestly say that I troubleshoot or replace somewhere between 10 and 20 Android-based devices (or BB or Windows) for every iPhone that requires more than a simple restart (not a wipe). The damn thing is simply the most reliable piece of equipment on the market, in my opinion.


even moreso than the HTC Desire?

not all Android based smartphones are created equal.
 
2012-02-09 10:24:08 AM
anfrind: LindLTaylor: I have Motorola Droid. Pay about 65 per month for unlimited data. 4G. Love it. Does everything I want and then some. Never bored with it. I also have an iPhone 4 that the company provides. It is a paperweight.

The Motorola Droid doesn't support 4G.


Well then I guess that icon on my phone that says 4G is all bull shiat then and the messages that tell me that I am on 4G or not are false ones. I am on Sprint and live in Houston. We have 4G here. I don't live int eh boon docks. I just bought this phone a month ago. It is a newer model. I think you are incorrect. In fact I know you are.
 
2012-02-09 11:27:47 AM
rubi_con_man: ...Damn, you can't even buy one from apple without an attached plan...

not true. you can indeed order an iPhone 3GS, 4 or 4S from Apple direct unlocked (no contract carrier). I did this 3 weeks ago; no ATT software so better reception on T-mobile $50/month plan prepaid.
 
2012-02-09 04:23:19 PM
not true. you can indeed order an iPhone 3GS, 4 or 4S from Apple direct unlocked (no contract carrier). I did this 3 weeks ago; no ATT software so better reception on T-mobile $50/month plan prepaid.

So when do you break even vs. going with a mobile-provider-subsidized phone and expensive data plan?

Seriously, this might be a good idea.
 
2012-02-09 08:16:10 PM
LindLTaylor: anfrind: LindLTaylor: I have Motorola Droid. Pay about 65 per month for unlimited data. 4G. Love it. Does everything I want and then some. Never bored with it. I also have an iPhone 4 that the company provides. It is a paperweight.

The Motorola Droid doesn't support 4G.

Well then I guess that icon on my phone that says 4G is all bull shiat then and the messages that tell me that I am on 4G or not are false ones. I am on Sprint and live in Houston. We have 4G here. I don't live int eh boon docks. I just bought this phone a month ago. It is a newer model. I think you are incorrect. In fact I know you are.


My guess is that you're talking about either the Droid Bionic or Droid Razr. Normally when someone says "Motorola Droid", they're referring to the original Droid, which came out back in 2009.

I have one of those sitting on my desk right now, in fact.
 
2012-02-09 08:19:18 PM
anfrind: LindLTaylor:
Well then I guess that icon on my phone that says 4G is all bull shiat then and the messages that tell me that I am on 4G or not are false ones. I am on Sprint and live in Houston. We have 4G here. I don't live int eh boon docks. I just bought this phone a month ago. It is a newer model. I think you are incorrect. In fact I know you are.

My guess is that you're talking about either the Droid Bionic or Droid Razr. Normally when someone says "Motorola Droid", they're referring to the original Droid, which came out back in 2009.


...or maybe some other Motorola phone of that vintage, since you mentioned Sprint.
 
2012-02-10 05:04:39 AM
So instead of assrape and sodomy, they are getting away with merely assrape.
 
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