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According to Michael Rollins, an analyst from Citigroup Investment Research, Apple could receive around $300 per iPhone for each new Cingular subscriber. The analyst said that a similar deal was done between Cingular and Radio-Shack for each new service contracts

When we look closely at the pricing strategy revealed by Apple, we see that they could easily make space for a kickback like this. In any standard deal, a network operator would give a discount of around $300 on the purchased phone to the consumer for signing a 2 or 3 years contract with them. But with the iPhone, the consumer will have to pay the full price for the device AND sign a 2 years contract.

The only reason why the $300 does not end up in the customer’s pocket is that someone else is touching the money. I don’t see any reason why Apple would have let Cingular make higher profit than any standard phone when they are bringing the most anticipated mobile phone in years to the table…

This means that Apple would be the one stealing the $300 from the customer’s pocket!

Conclusion: if Apple makes $300 of profit on the iPhone and collect $300 of kickback, they make a grand total of $600 of profit on each iPhone sold. Now I understand Jobs when he said, “we had the Mac, the iPod and now the iPhone”. The device could be the most lucrative product the company ever had, and you are going to pay for that!

Any thoughts?