In a recent interview with Bloomberg TV, Broadpoint Amtech analyst Brian Marshall dropped some interesting tidbits about Apple’s exclusive relationship with AT&T. Regarding the subsidy Apple receives from AT&T, Marshall notes that this amounts to $450 for each iPhone sold. Interestingly, Marshall remarks that this subsidy will soon fall to $300 once Apple’s exclusive relationship with AT&T ends in June of 2010. Lastly, Marshall also states that 4% of all AT&T subscribers are responsible for nearly 40% of AT&T’s bandwidth. This echoes recent statements from AT&T’s top brass which also indicated that iPhone users account for a disproportionate amount of network bandwidth.
As to the expected change in iPhone subsidies, a $150 subsidy hit would undoubtedly have an impact on Apple’s bottom line, but Marshall states that if Apple is able to get the iPhone onto Verizon in the second half of 2010, it will more than be able to make up for the subsidy loss with volume – and given that a good number of consumers would love to buy an iPhone but for the fact that it’s exclusive to AT&T, we’re inclined to agree.
Reports of Apple’s iPhone landing on Verizon’s network stretch back all the way to April, 2009 and recently resurfaced just a few weeks ago in light of a report that Apple is currently working on an iPhone with a hybrid UMTS/CDMA chipset that would allow it to run on Verizon’s CDMA network. This rumored phone has already been dubbed Apple’s “worldmode iPhone”.
The bottom line is that there will come a time when everyone willing to switch to AT&T for the iPhone will have already done so. That being the case, Verizon’s cachet of 80 million subscribers represents a huge growth opportunity for Apple and Verizon, and we can only hope that some sort of deal between the parties is struck sometime before 2011.