What’s inside the iPhone4 Brand Stategy?

by Rob Rutkowski on June 28, 2010

There are two important lessons to be learned from the latest iPhone 4.  Here’s my take:

1- ATT learns from Gillette and HP. Have you ever wondered how HP can sell you a scanner/fax/copier/color printer for $100?  Were you still wondering after you bought your first set of inkjet cartridges?  Just like razor handles and printers, ATT has learned to give away the phone to earn the kingdom of recurring monthly revenue.  Here’s how:

ATT pays Apple a couple hundred dollars (according to some very good industry guesses) for each iPhone a customer buys.  It’s worth it.  Take me.  I’ve been a disgruntled but loyal ATT customer for years, reluctantly writing my check each month.

2- Use OPM (other people’s money). iSuppli has just released a teardown and analysis of the iPhone4.  According to a summary by NPR, the most expensive item is the ‘retina’ display, at about $28.50.  All told, iSuppli figures the iPhone costs $187.51 for a 16 gig phone, which retails for $199.  Not much left for marketing, support, etc.  But the ultimate customer isn’t YOU, it’s ATT.  Remember, they basically pay Apple the $200.  There’s no way iPhone makes a business case without that deal, and that’s why you continue to see Apple protect the ATT arrangement.

You can see the NPR article here >

You can order the full iSuppli analysis here >

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