Apple's rumored 10 percent tribute

 

Apple's rumored 10 percent tribute
The Financial Times reports that Apple has chosen some of its European partners for the iPhone: T-Mobile of Germany, Orange of France and O2 in the U.K. have signed contracts with Apple that see them paying Apple 10 percent of the revenues made from the calls and data transfers from iPhones. While none of the carriers would comment on the report, the newspaper's sources say that the carriers will officially announce their deals with Apple at the IFA trade fair in Berlin at the end of the month.

The deal, if true, marks a watershed moment for the carrier/handset maker relationship.

The Financial Times claims that these deals are the first to give handset makers a direct share of revenues from a mobile carrier, which could lead other handset makers to attempt similar deals. But would any other handset maker be able to manage such a deal? As has been noted numerous times, the iPhone enjoyed an unprecedented amount of buzz leading up to its launch as well as a firmly entrenched cousin in the portable music player sector, the iPod. So how could an incumbent handset maker recreate similar conditions warranting such a steep deal with mobile carriers? Seems unlikely. 

The idea that these carriers may have submitted to Apple's demand for 10 percent in tribute, is disappointing--at first blush. After all, these carriers are buying their way into a relationship with Apple, probably assuming that this first deal sets them up for future deals with the subsequent generations of iPhones, which could certainly prove very profitable in the long run. But who is to say Apple won't demand 15 percent or 20 percent for those models? If the Financial Times' report is to be believed, it looks like these carriers are willing to go down that slippery slope. -Brian

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