As you may have heard, Apple struck a deal with Best Buy a few days ago to sell the iPhone semi-exclusively starting September 7. But one analyst has noticed this may not be a very great deal for Best Buy, at least in the sales department. In fact, Best Buy stands to earn a maximum of $50 per phone.
Despite the lack of revenue from the deal, Best Buy does stand to earn big from accessory sales. And while no one knows exactly how the numbers work out, Colin A. McGranahan with Sanford C. Berstein & Co told BusinessWeek that since the wholesale price of the iPhone 3G is probably around $550, AT&T could make up to a $350 subsidy from the voice and data fees. Likewise, Apple would get a $450 subsidy from AT&T.
But the picture is not so rosy for Best Buy:
If it paid a $550 wholesale price for an iPhone that it then sells for $199, it may only receive $350 to $400 back from AT&T, leaving it with a $0 to $50 profit. On another smartphone with a price to consumers of $199, Mr. McGranahan estimated the profit could easily be $100 to $200.
Yikes! The deals Apple cuts with retailers are not very generous, but they seem to work for now. Because when someone goes into a store looking for an iPod or an iPhone, that’s precisely what they want.
It’s all part of Best Buy’s plan for world domination! LOL!!
Seriously, you can count on one hand (and still hold a cup of coffee) the carriers that aren’t on their shelf.