How Apple Will Benefit From the End of Smartphone Subsidies

Much of the attention surrounding the end of smartphone subsidies has been focused on the impact on wireless carriers. T-Mobile (NASDAQ: TMUS  ) is in the process of rolling out new plans, and there are rumors that Verizon (NYSE: VZ  ) will probably end subsidies soon as well; if so, AT&T (NYSE: T  ) will certainly be close behind. But how will smartphone makers such as Apple (NASDAQ: AAPL  ) be affected?

In the following interview with the Fool's Alison Southwick, contributor Doug Ehrman discusses some of the potential impacts on Apple of the end of smartphone subsidies and why this might actually be good news for the iPhone maker.

A shift in the way wireless carriers do business may impact the fact that Apple has a history of cranking out revolutionary products -- and then creatively destroying them with something better. Read about the future of Apple in the free report, "Apple Will Destroy Its Greatest Product." Can Apple really disrupt its own iPhones and iPads? Find out by clicking here.

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  • Report this Comment On July 28, 2013, at 10:11 AM, ranchrfl wrote:

    I can't believe these talking heads do not understand that that THERE ARE NO CARRIER SUBSIDIES!!!!!

    CARRIERS ONLY FINANCE THE ACQUISITION OF A PHONE!!!!! T-Mobile blew the illusion of subsidies out of the water when they announced rates that were $20/month lower and then said you can pay the same as ATT for 2-years... These talking heads need to do the math and understand what they are reporting or find another job that doesn't require accuracy.

  • Report this Comment On July 28, 2013, at 2:34 PM, ConstableOdo wrote:

    Wall Street has already been saying that Apple will be the biggest loser if carrier subsidies are abolished because iPhones are the most expensive and no one will buy them with the requirement of full cash payment up front. No matter what happens, it's always said that Apple will suffer the most. It's the same reason why Apple will have the most problems selling iPhones in China. iPhones are too expensive, so no one can afford to buy them. As far as Wall Street is concerned Apple has the worst business model of all smartphone manufacturers because of trying to hold high profit margins. In BRIC nations, almost no one can afford iPhones. Only Samsung will succeed and Apple will fail. That has already been decided by most Wall Street investors.

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