It's a phrase companies love to highlight in press releases, conference calls and earnings reports. It's the type of revenue that -- unlike a flighty girlfriend -- tells investors, "You're safe with me; I'm not going anywhere."
No wonder then that Apple
The fact that carriers are willing to share their coveted cash flow with a device manufacturer is seen as a radical departure from the norm. Even venerated top handset manufacturers like Nokia
No, not likely. While Apple's ability to negotiate a piece of carriers' revenue streams is surprising, it's not completely unprecedented. Research In Motion
Considering that iPhone users tend to be big spenders -- with montly average revenue per user sometimes exceeding $100 -- giving even a small revenue cut to Apple would be a boon. If Apple can sell 10 million iPhones by next year, as CEO Steve Jobs wants, the high-margin recurring revenue could grow to make a noticeable impact on Apple's bottom line. No wonder then that Apple's stock jumped on the news, as investors sure like hearing this song.
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Fool contributor Dave Mock jumps when he hears songs too. He owns shares of Motorola. He is the author of The Qualcomm Equation. Vodafone is an Inside Value recommendation. The Fool's disclosure policy is a recurring policy that stays by your side the whole way.