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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
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?
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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