Apple (NASDAQ:APPL) does it again. Its latest iPhone 6 plus that features a 128GB memory is being sold at $949.99. The iPhone 6 plus being sold at the discounted price will be the unlocked version of the device.
According to statistics, a mere 1% of total Apple (NASDAQ:APPL) users buy an iPhone 6 Plus at full consumer price. Most consumers prefer to obtain an iPhone on contract. This triggers extensive competition in the market and lesser number of consumers obtain a full priced free of contract mobile devices.
Wireless companies that initiate such contracts do good business, but contracts also come with a cost. Analysts are of the view that such wireless companies lose capital on the mobile devices if customers refrain from keeping the device for more than 2 year contract agreement. In this stiff competition, four biggest players in the market often take up the challenge of these lengthy contracts.
It is quite common for wireless service providers to lose money on Apple (NASDAQ:APPL) iPhone. Analysts have gone so far to state that some of these carriers even went on to pay Apple (NASDAQ:APPL) $600 for earliest of an iPhone version. This is quite a norm for service providers and such actions help generating extensive profits for such companies. This usually works in favor of wireless service providers if a potential customer chooses to acquire a Samsung (OTC:SSNLF) or an LG, as such companies are likely to make better profits on these smartphone brands. However, if a consumer insists on obtaining an Apple (NASDAQ:APPL) iPhone, the profit margins are likely to be restricted.
Apple (NASDAQ:APPL) is expected to sell more than 50 million units of its iPhones in its current fiscal quarter. This quarter will include the holiday season, which hosts Thanksgiving, Christmas as well as New Year celebration sales. Hence, this part of the year always manages to generate impressive sales figures for most retailers and companies. This may seem a nicely done figure for the brand, however, major carriers are expected to lose several million dollars. Hence, the wireless service providers don’t bask in the festivity of the last quarter of the fiscal year.
However, if consumers decide to buy Apple (NASDAQ:APPL) iPhone 6 Plus version that comes with 128GB memory for $949.99 and then add the carrier service on top of that, the wireless provider in this unlikely scenario might end up with some winnings.
This situation is quite improbable since consumers might choose to just obtain the Apple (NASDAQ:APPL) iPhone 6 Plus at the reasonable price that it is being offered currently and decide not to top it up with a carrier is more likely.
While Apple (NASDAQ:APPL) might enjoy brilliant sales in the holiday seasons, same cannot be said for the wireless carrier providers. These companies take a fair share of the revenue pie during other fiscal quarters, however the last quarter is not very lucky for these companies. Their performance is highly affected due to their tug of war in stealing customers.