LOS ANGELES TIMES: AT&T, Sprint and Verizon, which pay hefty subsidies on the iPhones their customers buy, have seen their earnings and stock prices drop since they began offering the Apple handsets.
The iPhone has been a huge hit for Apple Inc., helping send the company's stock to all-time highs and producing record-breaking profits.
But for AT&T Inc., Sprint Nextel Corp. and Verizon Communications Inc., it's breaking the bank.
The three wireless carriers all found themselves answering to Wall Street in recent weeks for posting depressed quarterly earnings, and analysts pointed to the heavy cost of offering the iPhone as a culprit.
The iPhone has become the single most popular smartphone in the U.S., and that has left the carriers trapped in a kind of Faustian deal: The more iPhones they sell, the more money they lose.
That's because they have to buy the phone from Apple before they can sell it to their customers for hundreds of dollars less. The carriers are betting that they'll make back the difference and more by signing up customers for two-year plans and collecting monthly fees.
But so far, the carriers are finding that the math isn't adding up. » | David Sarno, Los Angeles Times | Friday, February 10, 2012
