$5 Billion: Verizon’s Cost of iPhone Subsidies

January 11, 2011 4:05 am

Verizon will be spending almost 5 billion dollars on subsidising the iPhone for its customers in the first one year. This is based on a 3 million sales projection, and a 400 dollar subsidy per customer.

Wireless operators pay companies such as Apple one price for a phone and then sell them to consumers for less to encourage people to sign up for two-year service contracts. The iPhone subsidy, at $400, is higher than the $200 to $300 that carriers pay for most smartphones, said Tina Teng, senior analyst for wireless communications at researcher iSuppli Corp.

Statistics Source: BusinessWeek

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