Piper Jaffray: Apple Gets $18 Per Month Per iPhone
Piper Jaffray: Apple Gets $18 Per Month Per iPhone
by , 7:00 PM EDT, October 24th, 2007
Apple Inc. is receiving royalties of US$18 per month per iPhone from AT&T, according to Piper Jaffray analyst Gene Munster. Carried out over the twenty four month period Apple uses to account for that revenue, Mr. Munster estimated that Apple will receive $432 per iPhone per subscriber from AT&T.
Silicon Alley Insider reported that Mr. Munster arrived at his new estimates based on Apple's quarterly conference call with analysts on Monday. He took the $118 million in revenue recorded by Apple during the September quarter and the approximately 1.15 million iPhones that have been activated through AT&T since the end of the July quarter to reach his figure.
The Insider also noted that Citibank analyst Richard Gardner looked at the same numbers and arrived at a figure of $12 per month per iPhone. If his numbers are correct, that would represent $288 over the course of a 24-month contract.
Apple has acknowledged that there is a revenue sharing agreement in place with AT&T, but has not revealed the terms of that agreement, hence the close scrutiny from analysts.
*In the interest of full disclosure, the author holds a small share in AAPL stock that was not an influence in the creation of this article.
If you are interested in Apple's stock, join our forum members in the Apple Finance Boards, a moderated forum for Apple Investors and people who are interested in Apple's financial dealings. For other stories regarding Apple's stock activity, visit our updated Apple Stock Watch Special Report.
Observer Comments
Apple is basically delivering a handheld computer with a phone included and they are getting a nice amount of revenue for intensive work (plus a lot of money invested) over a 2 year period.
Let them make their money - it will only go into more exciting products over the next 2 years.
I don't have one yet, but will probably spring for one when there is more memory available at a decent price - like 16 or 32 gigs for $399.
Wed Oct 24, 2007 10:07 pm Subject: "A billion here and a billion there...
Thu Oct 25, 2007 1:25 am Subject: Has anyone thought about who is servicing these iphones?
Basically if anyone has ever paid for apple's service plan it is an extended service contract. Considering AT&T is not able to service such a sophisticated system I am wondering why Apple does not get more revenue from AT&T. Apple does everything for AT&T. AT&T just has to maintain it's own system and these new customers are freeand completely serviced by Apple. Considering most phones will need some service in a two to three year period software upgrades and backup service is built into the Apple model. AT&T should pay and actually they should pay a percentage of usage to Apple because Iphone is a dataplan and a media delivery system. So it is easy fro iphone users to go over their minutes and bandwidth. Customer Service is going to challenge Apple and this extra cost will lost. basically it is a deal for AT&T
This link below shows the number of iphones sold during the quarter and also gives the revenue generated from them.
http://images.apple.com/pr/pdf/q407data_sum.pdf
So 1.119 million iphones sold. However the revenue from them is only 118 million. That tells me that per phone apple made a revenue of about $100.
How can that be? Average price of iphone is $400 and also there is revenue from att per month. Can some one explain me the math!
For other products like ipods this math works out to be reasonable.
Thu Mar 06, 2008 10:42 pm Subject: Re: IPhone revenues for Q42007
QuoteAnonymous wrote:
This link below shows the number of iphones sold during the quarter and also gives the revenue generated from them.
http://images.apple.com/pr/pdf/q407data_sum.pdf
So 1.119 million iphones sold. However the revenue from them is only 118 million. That tells me that per phone apple made a revenue of about $100.
How can that be? Average price of iphone is $400 and also there is revenue from att per month. Can some one explain me the math!
For other products like ipods this math works out to be reasonable.
Because they are amortizing the revenues over the life of the contract?
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