iPhone 5 poised to hit wireless carriers’ margins hard
Pity the world’s wireless carriers: They’re selling millions of iPhones. While most people might not see this as a reason to panic, the wireless carriers see it differently because they’re taking a larger-than-average hit on subsidies for the iPhone and they won’t make a return on their investment until nine months after the sale, versus just six months for the typical Android device. As Reuters reports, Verizon’s (VZ) profit margins are projected to fall to 43.6% in the fourth quarter this year, down from 47.4% in the third quarter, while AT&T (T) is poised to see its margins fall to 35.7% in Q4 from 40.8% in Q3.
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