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AT&T’s Bad Apple
What’s it they say about one rotten apple again? Someone may want to tell AT&T. For every $199 iPhone the company sells (and it sold 2.4 million in the last quarter), AT&T shells out $375 in upfront costs. As the exclusive carrier of the iPhone, AT&T’s losses come in the form of subsidies to Apple and marketing costs. The company insists that these investments will turn a profit in the long run. Either way, Apple is not complaining about the arrangement—its shares have risen while AT&T’s have plummeted. AT&T, according to one analyst, is “transferring shareholder wealth to Apple.”
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