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iPhone Sales Drop, Verizon Wireless and ATT Profits Up

iPhone sales have dropped again in the 2nd quarter, which is becoming a trend. A lot of people are holding out for the iPhone 5, which explains why the iPhone sales are down but there is another explanation that is far more interesting as to why VZW’s and AT&T’s profits are up because of this.

The wireless industry is based on subsidies. In order to offer devices at a discounted price the carriers must pay manufacturers subsidies, otherwise device prices would be sky high. Apple demands the highest subsidies from the carriers to offer their phones which means that the margins are much thinner on Apple devices. So, as Apple sales drop because of the much anticipated iPhone 5 release the carriers are driving profits through the sale of more profitable devices. It’s kind of interesting to think about.

Read More: http://fox8.com/2012/07/24/att-and-verizon-shine-as-iphone-sales-sink/

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One Response to “iPhone Sales Drop, Verizon Wireless and ATT Profits Up”

  • DJ says:

    Since apple forces carriers to have a larger subsidy, it creates less profit the carrier. Hence why sales training and focus is on other devices that create more profit for the carrier and it’s employees. But at the same time other devices do allow more freedom, selection, and solution for the consumer and their needs. While creating more profit for the carrier and it’s employees. Win win :)


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