Tuesday, February 28, 2012

iPhone subsidies -- are Android users supporting Apple?

Subsidies are larger for the iPhone than for other smartphones.  Sprint's losing money on each iPhone it sold.  So are Verizon and AT&T.  If you sign a contract to buy iPhones, you can expect to watch your earnings per subscriber drop.

Makes sense therefore, that T-Mobile would not jump into the iPhone waters, only to end up losing big money, when it's already having trouble with money.  It would be a Pyrrhic victory to stem the loss of subscribers only to lose money on those subscribers.

But hold on, this begs the question: Are Android smartphone users by default supporting iPhone users, by way of higher data subscription and device prices, so that carriers can continue to fund Apple's profit growth?

Begs another question: Couldn't Microsoft buy its way into market share by simply removing the need for carriers to subsidize phones?  What exactly IS Microsoft's strategy to catch up, anyway?

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