The Flip Side of a Subsidized iPhone

Yesterday, Apple announced that AT&T will start subsidizing its iPhone device, making it available for as little as $199 for an 8 Gigabyte model. Many consumers are likely to appraud that decision: By offering a subsidy of an estimated $350 per unit for the device, AT&T will likely see its iPhone sales double, estimates Craig Moffett, an analyst with Sanford C. Bernstein. So it's a win-win for consumers, right? Not necessarily.

Yesterday, Apple announced that AT&T will start subsidizing its iPhone device, making it available for as little as $199 for an 8 Gigabyte model. Previously, users have had to pay full price for it, which is why many consumers are sure to applaud the decision. By offering a subsidy of an estimated $350 per unit for the device, AT&T will likely see its iPhone sales double, estimates Craig Moffett, an analyst with Sanford C. Bernstein. So it’s a win-win for consumers, right? Not necessarily.

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