Apple gambles on killing iPhone subsidy

Posted by Nigel Constantine

When and if Apple signs a deal with Verizon to flog its iPhone it is likely that the price of the gadget will rise.

Analyst Brian Marshall of Broadpoint.AmTech believes that the deal will be made in the second half of next year, but it is unlikely that Apple will be able to bully Verizon into the same level of subsidy that it got with AT&T.

AT&T is supposed to be subsidising each phone by $450 while the best Verizon will come up with is about $300.

Marshall thinks that that while this might cause Apple to lose a bit of cash, if the Verzon deal works it could sell an extra 14 million iPhones and claw back the cash in volume sales.

It is fairly risky and it is equally likely that most people who own an iPhone have already bought one.

Those who have signed their souls away to an AT&T contract are not going to be able to jump ship that easily.