Telecom & Wireless

A $949 iPhone

apple iphone 6 introLost in the sea of pricing offers for the iPhone 6 Plus 128GB is a phone consumers can buy outright for $949.99. This is for an unlocked version. If there is a more expensive smartphone that is not covered in real gold or platinum, try to find it.

Probably less than 1% of Apple customers actually pay full price for the iPhone 6 Plus. There are too many aggressively priced wireless plans, and most people want a subscriber service to easily marry with their devices. Wireless companies take advantage of this, but at a cost. Some analysts believe that companies like AT&T (NYSE: T) lose money on the iPhone 6 if customers do not keep the device for more than the initial 24-month agreement. And, in the brutal fight for market share, the four largest wireless carriers often take this long gamble.

READ MORE: iPhone 6 outsells iPhone 6 Plus by big margin

There is nothing new about losing money on the iPhone. Experts on carrier pricing believe that some carriers paid Apple (NYSE: AAPL) as much as $600 for early versions of the iPhone. Maybe low pricing is simply a way to get potential consumers in the door in the hope that they will buy a Samsung or LG smartphone, on which the wireless carrier can make a better margin. This approach may work, unless the customer insists on owning an iPhone.

Presumably, Apple will sell over 50 million iPhones in the current quarter, which includes the holiday. On paper, this means the four largest carriers will lose hundreds of millions of dollars. That is, unless, consumers buy an iPhone 6 Plus 128GB version for $949.99, and then pick a carrier afterwards.

Happy holidays, for Apple, but not for its carrier partners. They are too busy in bloody battles to rob customers from one another.



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