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  • Who's Making Money off the iPhone?

    It's been clear for some time that the iPhone is a huge moneymaker for both Apple and its US carrier AT&T, as well as the constellation of component suppliers that make parts for it. Tracking the actual dollar figures, though, is a difficult task given the complexity of the iPhone ecosystem and the secrecy surrounding Apple and AT&T's business relationship. A post on GigaOM this week, though, took a stab at pulling together what's known and believed to be true about the iPhone business, and did it in an innovative, highly readable format. Instead of a long post filled with dry facts and figures, the site created a graphic with simple charts and graphs. It's an interesting "read."

    For the 5.2 million iPhones it built in the third quarter of this year, Apple spent $1 billion with its components suppliers and manufacturing partners. The monetary gain alone is not the only benefit an iPhone parts supplier garners, though: having one of your components used in an iPhone gives bragging rights that helps those companies negotiate better deals for their own raw materials and passing those savings on to Apple. As an analyst quoted in the graphic points out:

    When you get a part in the iPhone, there’s a recognition that goes with it, and that can be good for business with others down the road.
    When Apple sells a $199 iPhone, AT&T reportedly pays out $351 in subsidies. Apple charges AT&T $550 per iPhone that it buys for resale in its online store or retail outlets. AT&T later makes back the money it spent on the phone in monthly service charges. With an unlimited 3G plan sold for $30 a month, AT&T makes $720 in data plan revenue over a two-year contract, which adds up to $2 billion US for the carrier.

    image via Geek.com from original GigaOM graphic
    This article was originally published in forum thread: Who's Making Money off the iPhone? started by Paul Daniel Ash View original post