All the worse for the iPhone?


I know that after looking at worldwide sales figures for the iPhone (especially the 3GS), it’s not much of a stretch to imagine Steve Jobs looking something like the above money-mongering Scrooge. But for some of those companies that stand between the common folk and the McDucks at Apple, things aren’t going so well.

Many telecom operators all over the world report that selling the iPhone does not rake in money. The following results are from the smart people over at Strand Consult. The major cell operators in Russia actually lost money on iPhone sales. Analysts calculated that a total forfeiture of 1.5 billion US dollars will have to be written off by the “big three” – as they are known in Russia – because a large chunk of preordered phones were left unsold.


And things don’t seem that much better in “civilized” countries. According to the study done by Strand Consult, significant discounts offered by the major telco operators all over the world, don’t lead to increased sale-driven revenue for the companies themselves; rather, in a number of cases, revenue is actually lowered. They go on to say that the results of the study show that none of the operators have gained any market share headway, revenue, or profit by selling the iPhone. In a number of cases, the opposite has proven true.

In early June of this year, AT&T Inc. (among other sources) mentioned , rolling out the 3GS would be as costly as it was to bring the 3G to market. Analysts also report that the largest telco operator in South-East Asia, Singtel, has stated lower profits thanks to the necessity of subsidizing the sales of expensive phones. Among other indicators, the iPhone lowers Sigmatel’s operational profit margin by 3-4%.

The main complaint by operators is that the initial price the iPhones is too high for consumers. Will this have an impact the possibility of cheaper iPhones? Who knows! But meanwhile, Apple has reported a significant increase in their Q2 revenues – something that should give us all pause.

[via RBC Daily]

Next ArticleSoundcat's ME series earphones launched in Korea